Broker Gallagher has released its 2020 pre-renewal review, covering past results and the situation for the policy year to date, with individual sections on the Group Clubs. Today: Steamship Mutual
Full Name: Steamship Mutual Underwriting Association (Bermuda) Ltd
Web Address: www.simsl.com
Address: Aquatical House, 39 Bell Lane, London, E1 7LU, UK
Tel: +44 207 247 5490
Fax: +44 207 426 6800
S&P Rating (last change: increase to A from A- in 2016) ‘A’ (Stable)
Geography (Note: The figures below are from Steamship’s own report.)
|Africa, Middle East and Indian sub-continent||5%|
Types of entered vessel (also from Steamship’s report)
|Cruise & Ferry||12%|
Gallagher asked CEO Stephen Martin what was the most valuable lesson learned from 2020. Martin said that it seemed clear that the efforts of the World’s nations to control and eliminate the viral threat would take longer, cost more and wreak more damage than was widely expected even as recently as a few months ago. “Catastrophic or unimaginable events are by definition hard to predict and may take us by surprise; but insurers should be sufficiently capitalized to withstand unexpected losses and to meet, within reason, the expectations of their policy holders”, he said.
Martin continued: “This is not to say that the club is unaffected by the events of the past six months, or that members have avoided the impact of Corona. We believe however that the Club strikes the right balance between maintaining a reasonable level of reserves on the one hand, and avoiding excessive premium demands on the other.”
On being asked whether, with hindsight, he would have done anything differently, Martin said that capital was only one of the Club’s strengths; “service and commitment, and careful member selection, play equally important roles in achieving the Club’s goals”. He said that, while one could always think of things that might have been done differently, “overall we believe we met the challenges, not least because we place great emphasis on financial resources, security and service. We are fortunate to enjoy the confidence of members and brokers alike, and will continue to do what is necessary to justify that confidence.”
Gallagher noted that Steamship was the only Group Club to operate at a combined ratio of under 100% during 2019-20, this being due, “to no little extent”, to releases from back years, “as their current year policy year underwriting results did not reflect the same profitability, being at 113% after 12 months”.
The average combined ratio across the past 6 years had been 92.1%.
The Club continued its programme of returning funds to members in 2019-20, once more using the mechanism of a capital distribution to return $16.3m to members. Gallagher noted that this meant that the Club had returned almost $90m to members over the recent cycle of return funds, via both capital distributions and return calls.
As part of the Brexit process, with effect from February 20th 2020, the contracts of continuing Members with a country of management in the EEA were renewed into SMUAE, a newly authorized insurer incorporated in the Republic of Cyprus.
|On Advance Call||7.5%||0.0%||0.0%||0.0%||0.0%|
|POLICY YEAR DATA||2019-20||2018-19||2017-18||2016-17||2015-16|
|Total Free Reserve||515.3||467.0||516.0||510.3||440.3|
|Tier 1 Capital||461.1||455.4||505.9||504.6||–|
|Tier 2 Capital||88.5||80.8||93.6||106.3||–|
|Solvency Capital Required||251.1||245.4||247.0||227.3||–|
|Return on Total Assets||5.59%||1.43%||3.25%||2.63%||-0.24%|