Posted on: 3 May 2016
The Shipowners’ Club, the leading mutual P&I insurer in the smaller and specialist vessel sector, has reported resilient results for the period ending 31 December 2015.
At the Club’s Annual General Meeting in July 2015, it was agreed to change the Club’s financial year to 31st December. As a consequence, and for this period only, the financial statements have been prepared for a shortened period of 20 February 2015 to 31 December 2015.
Chairman Philip Orme announcing the results highlighted that “the Club had once again, and for the sixth consecutive reporting period, delivered an underwriting surplus. The surplus of US$ 3.2m (Combined Ratio 98.2%) demonstrates the disciplined and experienced underwriting strength of the Club coupled with our robust re-insurance programmes. Despite extremely challenging and competitive market conditions our renewal saw a member retention rate of 99% – a reward for our service culture and business model to small and specialist vessel owners.
“Losses on investments and currencies, held in jurisdictions where the club has to maintain high levels of liquidity for regulatory compliance resulted in an overall deterioration in free reserves of US$20.9m. Notwithstanding this our balance sheet remains extremely strong. The financial strength, underwriting disciplines and competitive position demonstrated at renewal were recognised by Standard and Poors who improved the Club’s rating from A- Stable to A- (Positive) in November 2015.
The Club’s investment portfolio is invested for the long-term in a mixture of equities and fixed income products. Occasionally there is volatility in investment returns, but it is important to note that, over the past 10 years, the Club has seen its investment portfolio performance significantly outperform benchmarks. The Club continues to take a portfolio, long-term view to investment”
Simon Swallow, Chief Executive commented: “as the Club celebrated proudly its 160th anniversary during 2015, the trading conditions for our Members, their producing brokers who bring the business to the Club and the wider maritime industry have continued to be challenging. It is our history, our expertise and our mutual ethos that have allowed us to continue to grow while providing support to our Members through times of difficulty.
“This year also saw further diversification, within our field of expertise, driven from the Club’s desire to offer innovative insurance solutions while focussing on risks we understand well. Our partnership with Swedish insurer Svensk has allowed us to offer an alternative approach in Scandinavia, and the establishment of CTRL Marine Solutions Ltd, a wholly owned subsidiary of the Club, offers enhanced legal and technical services”
Financial summary:
- Combined ratio 98.2%
- Capital and free reserves US$ 279.4m
- Earned premiums US$182.0m
- Incurred claims US $136.1m
- Underwriting result US$ 3.2m
- Investment portfolio returned a loss of US$ 16.4m
- Gross tonnage 24.6m
Mr Swallow added “we continue to work closely with our brokers, our partners and our Members as we ride out the storm created by a reduced freight market and low oil prices, all set against a legal environment that fuels the possibility for increasing claims costs. In an era where there are a wide variety of P&I solutions to choose from, we believe our mutual non profit making structure, and its value of putting the Member first, together with the Club’s P&I expertise provides owners with the best product and service to cover their individual risks.”
