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: Shipowners’ Club.
Full Name: Shipowners Mutual P&I Insurance (Luxembourg).
Web Address: www.shipownersclub.com
Address: White Chapel Building, 10 Whitechapel High Street, London, E1 8QS, UK
Tel: +44 207 488 0911
Fax: +44 207 480 5806
Geography
| Asia-Pacific | 50% |
| Europe | 21% |
| RoW | 15% |
| Americas | 14% |
Types of entered vessel
| Other | 63% |
| Passenger/Ferry | 15% |
| Offshore | 12% |
| Tanker/Gas Carrier | 6% |
| Unspecified | 5% |
Gallagher asked CEO Simon Swallow what to date was the most valuable lesson learnt from 2020/ Swallow said that in such unpredictable times, when some insurers continued to focus on growth, “we have been reminded that our existing Members’ seek predictability and consistency – in service, in premium and, so importantly, in our absolute focus on promptly settling and paying claims. It is these simple but vital areas that ensure peace of mind for our Members and their brokers.”
Gallagher asked CFO Simon Peacock whether the Club would in hindsight have done anything differently. Peacock said that it would be easy to choose what we could have done differently, with the benefit of hindsight.
“In the absence of a crystal ball, we are delighted with how the Club has performed. Our remote working has worked well these past six months; if only we had sub-let our offices!”
Gallagher noted that the Club had reported on its half year results to June 30th 2020, which confirmed that the significant collapse in investment asset values occasioned earlier in the year by the Covid-19 pandemic had been reversed by the year’s half-way point. The Club earned a small investment yield in this period which, coupled with underwriting at a 102.2% combined ratio, resulted in a small loss of $2.1m in H1.
The Club’s solvency return revealed that the Club had $155.6m in ancillary own funds (Tier 2), of which $100.5m were eligible for SCR purposes. Gallagher said that, while some of these funds might derive from adjustments regarding its Hydra cell and other sources, the lion’s share of such amount would be attributable to the Club’s potential to raise supplementary calls. “Given that perhaps 50% of the Club’s premiums are from members who are entered on a fixed basis, in a Club that has not made an excess call in living memory, this figure does seem incongruous”, said Gallagher.
| TONNAGE | 2019-20 | 2018-19 | 2017-18 | 2016-17 | 2015-16 |
| Owned Tonnage | 26.6 | 26.7 | 24.9 | 24.8 | 24.0 |
| Chartered Tonnage | 0.5 | 0.5 | 0.5 | 0.6 | 0.6 |
| CALL HISTORY | 2020-21 | 2019-20 | 2018-19 | 2017-18 | 2016-17 |
| Forecast Call | 0% | 0% | 0% | 0% | 0% |
| Latest Estimate | 0% | 0% | 0% | 0% | 0% |
| GENERAL INCREASE | 2020-21 | 2019-20 | 2018-19 | 2017-18 | 2016-17 |
| On Advance Call | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| On ETC | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| POLICY YEAR DATA | 2019-20 | 2018-19 | 2017-18 | 2016-17 | 2015-16 |
| Call Income | 229.2 | 223.1 | 216.8 | 226.4 | 241.4 |
| Incurred Claims | 166.2 | 173.5 | 135.1 | 150.1 | 157.3 |
| Total Outgoing | 249.0 | 255.0 | 211.4 | 228.0 | 236.7 |
| Underwriting Result | -19.8 | -31.9 | 5.4 | -1.6 | 4.7 |
| Call Income/GT | 8.46 | 8.20 | 8.54 | 8.91 | 9.81 |
| Claims Incurred/GT | 6.13 | 6.38 | 5.32 | 5.91 | 6.39 |
| SOLVENCY | 2019-20 | 2018-19 | 2017-18 | 2016-17 | 2015-16 |
| Total Free Reserve | 340.0 | 303.8 | 341.7 | 294.0 | 279.4 |
| Tier 1 Capital | 280.9 | 266.2 | 312.1 | 274.3 | |
| Tier 2 Capital | 100.4 | 98.5 | 107.3 | 108.3 | |
| Solvency Capital Required | 200.9 | 197.0 | 214.7 | 216.6 | |
| INVESTMENT INCOME | 2019-20 | 2018-19 | 2017-18 | 2016-17 | 2015-16 |
| Return on Total Assets | 5.91% | -2.71% | 4.76% | 3.05% | 0.99% |