The American Club told its annual general meeting that it registered 5% growth in premium and new entries in the last policy year and is positive about 2021 after making further gains.
The protection and indemnity mutual’s 2020 earnings were helped by a strong 5.4% investment return.
The downside was a loss on its pure underwriting activities with a combined ratio of 112%. The year threatened to be the highest claims year ever for International Group of P&I Clubs pool claims, which has generally had a big impact on P&I earnings.
The American Club said its fixed-premium subsidiary Eagle Ocean Marine performed well with a 17% compound annual growth rate in premium over the past three years.
Cyprus-based hull and machinery subsidiary American Hellenic Hull also strengthened its balance sheet as the market hardened.
The American Club said its 2020 growth has continued into this year.
At the 2021 February renewal, the club applied a 5% general increase and secured the equivalent of a 7% increase in revenue when changes to deductibles and other insurance conditions are taken into consideration.
It has also experienced growth in the early part of the year, with a further 7% rise in mutual P&I entries.
“The disruption caused by the Covid-19 pandemic brought unprecedented challenges both to global commerce in general and to the conduct of insurance business in particular,” said Phoenix Shipping & Trading managing director George Gourdomichalis, who was re-elected as American Club chairman at the meeting.
“Nevertheless, progress was achieved in every sphere of the club’s affairs, notwithstanding adverse operating conditions.”
Chief executive Joe Hughes warned that premiums may still have to rise to help clubs address underwriting losses.
“Technical underwriting results among P&I providers remain under pressure, highlighting a need for more sustainable pricing for the future,” he said.
“Nevertheless, despite the stresses of the past 12 months, the American Club looks forward with its characteristic optimism to a future of continuing opportunity.”
The members of the International Group have all reported underwriting losses for the 2020 policy year.
