Shipowners’ Club reports underwriting surplus
Smaller vessel specialist brings combined ratio below 100%, becoming the first International Group member to report underwriting profit in three years
Smaller vessel protection and indemnity (P&I) provider Shipowners’ Club has become the first International Group affiliate to report a positive underwriting result for the last three years, with a combined ratio of 98.7% for the 2021 financial year.
After a recent period of rate erosion and record pool claims, no club has returned a break-even performance since 2019, and most have sought major premium increases to compensate.
Shipowners’ achievement adds further evidence to the contention that P&I pricing has now stabilised, after three years of hefty price hikes, a proposition recently argued by Standard Club chief executive, Jeremy Grose.
The club obtained almost all of the 7.5% general increase it asked for at the last renewal round, with aggregate premium up 7.3% to $249m.
Overall surplus came in at $17.4m, made up of an underwriting gain of $2.9m but primarily driven by investment income of $ 15.6m, reflecting a return of 3.5% on the club’s portfolio.
This result brought the free reserves to $396.4m, which has contributed to the club’s A (stable) rating from Standard & Poor’s.
Chief executive Simon Swallow highlighted the impact of Covid-19, including collateral risks arising from incidents, and delays in responding to casualties, as restrictions prevented salvors and surveyors from attending onsite.
This article first appeared in Lloyd’s List, a sister publication of Insurance Day