A decline in investment income at protection and indemnity (P&I) mutual the Shipowners’ Club has put it into the red.
The club reported a $37.9m loss in 2018 compared to a $47.4m surplus in the previous year.
Shipowners also had a technical underwriting loss in 2018 with a combined ratio of 104% which was less than the 105% it had been predicting.
A combined ratio in excess of 100% indicates more paid out in claims and expenses than received in premiums.
Shipowners said despite the red figures it is still in good financial health with free reserves of $303.8m and an A rating from rating agency Standard and Poors. However its free reserves have shrunk considerably from the $341.7m announced in 2017.
Another positive is a 6.9% increase in its insured fleet to 27.3 million gross tonnes in 2018.
Shipowners’ chairman Philip Orme said that Shipowners’ had resisted an increase in premiums in 2018 because of the difficult trading conditions for its members. But he said the investment market is now turning in its favour.
“Whilst the underwriting deficit and the negative investment yield reduced the Club’s net assets, the Club remains well capitalised. It has been pleasing to note that the first quarter of 2019 has seen an upturn in investment markets to the extent that the Club has substantially recovered the 2018 investment deficit,” Orme said.
Chief executive Simon Swallow said: “Our Members are insured by a well-capitalised Club which has a long-standing track record of being ready to stand by them when claims arise.”
