Bergen-based marine insurance mutual Norwegian Hull Club (NHC) has announced a $9.9m pre-tax profit for 2018 and is set to reward members with a $5.7m cash bonus.
The refund represents 7.5% of paid-in premiums and will be decided at its upcoming annual meeting.
NHC chief executive Hans Christian Seim said: “As a mutual insurance company, our ambition is to reinvest and share our profits with our members.”
However, 2018’s profits were down compared with 2017, when the NHC recorded a pre-tax profit of $29.8m.
Investment returns
The drop appears to be the result of declining investment income last year.
In 2017, NHC earned $35.8m in investment income compared with just $1.6m in 2018.
NHC, which provides a wide range of marine insurance products, also recorded a positive technical underwriting result in 2018 with a combined ratio of 94%.
A combined ratio under 100% represents more earned in premiums than what was paid out in claims and costs.
NHC’s gross premiums amounted to $172m in 2018 compared with claims of $149m.
Seim believes the prolonged period of low hull rates has come to an end and that premiums are showing signs of improvement.
After experiencing a soft insurance market for at least a decade, the tide has finally shifted
Hans Christian Seim
“After experiencing a soft insurance market for at least a decade, the tide has finally shifted,” he said.
He cited a number of positive factors that are set to strengthen hull rates, including the recent withdrawal of many insurance providers from the market and the need for insurers to raise rates following major natural catastrophes in 2017 and 2018.
NHC has been following a diversification strategy and from February began to provide owner’s with protection and indemnity cover.
According to its annual report, Seim earned a salary of $495,000 including pension and other benefits last year.
