UK based Steamship Mutual recorded a technical underwriting loss in its latest policy year because of an increase in claims.
Its combined ratio, which indicates its underwriting performance, was 116% in the year to 20 February 2019, compared to 101% in the previous year.
A combined ratio above 100% indicates claims costs exceeded premium income and expenses.
“Increasing levels of claims from members and from the International Group pool are reflected in a combined ratio of 116%,” Steamship Mutual said in its earnings statement.
However, none of the International Group pool claims involved Steamship’s covered vessels it said.
Premiums also fell back by $14m in the year.
Investment income was also down at $18.8m, which along with the capital redistribution to members, reduced its free reserves to $467m from $489m in the previous year.
However, on a more positive note, Steamship returned $21.9m back to shareholders in March this year.
Steamship Chairman Armand Pohan said: “The Club ended the 2018/19 year in a strong financial position, enabling it to avoid a general increase at the 2019/20 renewal and to distribute over US$20 million of capital to Members.
Claims in the 2018/19 policy year claims are now estimated to be greater than originally forecast, and there were lower levels of claims reserve releases from earlier years.
"Pool claims were also higher than in preceding years. At the same time, premium fell, reflecting improved member records, cancellations because of sanctions, and some losses (and gains) at renewal.”
Tonnage covered by Steamship also increased to an all time high of 160 million gross tonnes.
Its free reserves, although reduced, are still well in excess of it is AAA S&P rating level.
