American Club reports strong tonnage and premium gains at renewals

American Club has reported a year-on-year P&I tonnage increase of 10% and premium income growth of 4%. In FD&D, tonnage and premium grew by 8% and 2% respectively.

Mutual P&I tonnage increased by more than 1.6m gt as of February 20th, compared with the previous year, and by just under 900,000 gt in regard to mutual FD&D entries. Year-on-year premium growth was more subdued – with the club noting that soft market conditions continued to prevail. Revenue increases of 4% for P&I and 2% for FD&D entries were recorded, with the average rate per gt on renewing P&I entries about 1.5% higher than the expiring figure. American Club said that this was “a positive sign for risk pricing into 2019 and beyond”.

The club said that its retained claims exposures continued to develop favourably into 2019; emergence for 2018 at the 12-month point being some 26% better than the corresponding numbers for 2017. “While the figures are immature, they augur well for the future, although the incidence of larger claims within the International Group Pool over recent months will counterbalance to some extent the very favourable results of the Club’s own Members”, the club said.

Investment earnings were said to have rebounded “substantially” in January 2019 following what was described as a “creditable” 2018 year-end performance. Among the Group clubs, American Club has one of the higher percentages of reserves in vested in equities.

The Club’s investment return was flat at year-end 2018 although the Club noted that this was substantially better than benchmark. The total investment portfolio generated a return of 2.7% for January 2019 alone, with a positive 1% in the fixed income space being further buoyed by an equities’ performance in excess of 7% for the one-month period.

The Club said that its fixed-premium operation Eagle Ocean Marine booked revenue growth of 42% as fixed premium market continues to undergo realignment. EOM acquired nearly 450,000 gt of new business over the renewal season, reflecting additional revenue of about $2.75m.  Year-on-year premium for EOM increased by 42% as of February 20th, while its claims performance continued to develop favourably.

Joe Hughes, Chairman and CEO of SCB, Inc, Managers of the American Club, said that “the 2019 renewal was thoroughly positive for the American Club and Eagle Ocean Marine. Both performed exceptionally well in a challenging environment.  Their success in attracting new business speaks to the confidence of the global maritime community in the Club’s and EOM’s ability to deliver insurance services of the highest quality and relevance to their customers.”