Steamship Mutual has said its financial position is still robust enough to consider returning further cash to members after reporting an underwriting loss and seeing its reserves shrink.
Armand Pohan, chairman of the London-based protection and indemnity insurer, described the club’s finances as “still strong” despite reporting a combined ratio of 116%, indicating an underwriting loss.
Steamship also saw its cash reserves fall from $516m to $467m in the policy year to 20 February 2019, the mutual said in its latest financial report.
Financially strong
Despite the setbacks, Steamship said is still one of the financially strongest members of the International Group of P&I Clubs, despite a capital ratio of 219%.
Steamship pointed out that over a six-year period, the club has made an underwriting profit with an average annual combined ratio of 92%.
It also made an investment return of $19m in 2019, despite a worsening investment climate.
Steamship managed to return $22m to members in 2019, and $26m in each of the two preceding years.
Pohan did not rule out returning more cash to members next year.
“The club’s financial strength means that in October, the board will again consider whether funds should be distributed to members,” he said.
However, Steamship was hit by a $14m fall in revenue last year after it agreed not to raise premiums.
In a separate development, Steamship said that it had changed its mind over where it will locate its European base in response to Brexit.
The mutual had planned to set up an office in Rotterdam, but said it will now locate the European base in Cyprus.
“Cyprus is a centre of shipping operations, with a number of members based there,” Pohan said.
