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American Club reports stability at 2024 P&I renewal

American Club has reported “relatively moderate drops” from the year-on-year renewal results, which it said reflected overall stability within the context of recent challenges added to the Club’s de-risking strategy.

Gross tonnage for mutual P&I entries now stands at 22.5m, down by approximately 2.5m compared to inception one year earlier, with a relative premium income drop of 6.5% over the period.

The mutual FD&D portfolio followed a similar shift, while charterers’ liability business was poised to increase by about 5% in 2024, compared with the previous 12 months.

The initial combined loss ratio for the 2023/2024 policy year was tracking at 103% as of December 31st 2023, but “with an improving trajectory”.

Eagle Ocean Marine, the Club’s fixed premium facility, which serves the operators of smaller vessels in local and regional trades, continued to benefit the mutual membership. Its overall historical net loss ratio now stands at 85%, with recent years being an improvement on this.

The Club’s Board had mandated an overall target increase in expiring premium of 7.5% for the 2024 policy year. As the overall combined loss ratio of renewing tonnage had continued to improve, the cash rise year on year on renewing business achieved was 4.2%, net of the downward adjustment in the IG reinsurance program cost for 2024, which was passed on to the Members in the usual manner.

Augmenting the premium position were terms changes calculated to be worth an added 1% to net premium, resulting in an overall increase of 5.2% on renewing premium.

In terms of the average premium dollar per gt from expiry of the 2023 policy year to inception of the 2024 policy year, this increased by 6.4%.

Tom Hamilton, Chief Underwriting Officer of American Club managers SCB Inc, said that the 2024 renewal campaign for the American Club built on the successes of recent renewals, “focusing on rate adequacy and continued refinement of its portfolio and evidenced the support of its core, loyal membership”.

SCB Inc CEO Dorothea Ioannou said that “while the growth of the two preceding renewals has slightly retreated, this was partly deliberate through de-risking strategies, and partly natural as a result of S&P’s downgrade”. She noted that the Club’s premium and tonnage volume remained at historically high levels, reflecting 30% more in premium and 20% more in tonnage as compared to the 2021 policy year, with consistently improving combined loss ratio results. “Furthermore, the high retention levels of renewing tonnage, in the face of extraordinary disruption, is a testament to the strength of relationships within the Membership and acknowledgment of the American Club’s service”.