S&P Global Ratings said it expects the Norwegian Hull Club (NHC) could be set to benefit from between a 10% to 15% increase in premium this year.

The ratings agency analysis of the Bergen-based marine insurance mutual suggests that the hardening of the hull and machinery market over the last two years still has some way to run.

In its analysis of the NHC S&P said: “Total premiums are forecast to increase by 10%-15% in 2022. The increase is expected to come from higher rates, new business, and higher insured values, all driven by increased demand for global shipping. These rate increases should offset expected increases in the cost of claims caused by rising inflation.”

S&P reconfirmed the NHC’s “A Stable” rating, based on its “AAA” rated strong capital base and strong business risk profile.

S&P said that because of its specialisation in the marine market the NHC can price its insurance services “at the top end of the market”.

The NHC is currently demonstrating a strong underwriting performance. In 2021 the NHC’s combined ratio was 85%, generating $33m in profit.

Underwriting profit

S&P’s figures revealed that the NHC's combined ratio in the first half of 2022 was 61%. A combined ratio under 100% represents an underwriting profit.

S&P forecasts the NHC’s combined ratio between 2022 and 2024 will be between 80% and 90%.

Potential risk areas for the NHC are its niche focus on the marine market and a small capital base in absolute terms which could make its finances vulnerable to volatility in the insurance market.