In Gallagher’s review of the 2019-20 policy year for the International Group Clubs, as well as a look at the performances of the clubs in the year to date, the broker noted thatwith increased diversification, most Clubs now had revenue streams arising from outside their core owners P&I activity, albeit some more than others. While it was not possible to split owned and chartered P&I premium in all cases, Gallagher said that it could reasonably estimate the impact of diversification on financial year premium income:
|North of England||268,438||21,218||–||–||68,461||346,567|
|West of England||209,561||12,102||–||–||–||221,663|
*In certain cases premium income splits are interpolated from policy year information etc. Amounts shown across two columns are not split by the respective Club.
1) Around 40% of Skuld’s policy year P&I premium income (excluding Lloyd’s) is in respect of fixed premium business, mostly their charterer’s book and a growing amount of diversified business written under Skuld corporate security;
2) 13.4% of the Japan Club premium is fixed, split approximately 70% coastal craft and 30% charterers business etc.
Gallagher noted that these figures were surprisingly consistent year on year between 2017-18 and 2019-20.
The broker said that the proportion of premium attributable to diversified operations continued to rise slowly despite the cessation of involvement in Lloyd’s and the rationalization of the SMMI portfolio, but this was primarily attributable to a parallel fall in P&I income by 3.5%.
M&E premium income has risen during the year both as a proportion of the book and in absolute terms – despite overcapacity in the sector. Results for M&E for the established players have returned to acceptable levels of underwriting profit in 2019‑20. Gallagher said that it was interesting to note that North of England was returning to the sector after a number of years away.