Marine insurer Gard has termed its first-half performance as “steady” after reporting a post-tax H1 gain of $65m on an Estimated Total Call (ETC) basis. The combined ratio net (CRN) was 96%, with an investment return of $58m.
The total equity for the Gard group rose to $USD1,211m, from $1,159m as at February 20th 2019.
CEO Rolf Thore Roppestad said that for next year’s premiums there would be no general increase in the Estimated Total Call for owners’ mutual P&I or for mutual FD&D. Gard said that deductibles would remain unchanged.
“This period has seen a good financial performance for the half year with premium growth despite a competitive pricing environment on P&I, a balanced combined ratio and a strong investment return”, he said.
Roppestad said that “our operations have demonstrated the steadiness that is a fundamental part of having strong mutual roots and a service-oriented mindset. Our view is always long-term; with an ambition to balance the mutual side of the group, where cost containment and service are key targets, with earning a modest return on our commercial insurance book that delivers capital benefits to our owners”.
The CEO added that “this stability is particularly important when you operate in an industry as fundamentally volatile as marine insurance, and the last year has seen a level of claims across the industry that reminds us its inherent unpredictability. Many marine underwriters across the world have felt the negative effect of this and there has been a significant withdrawal of capacity in the sector”.
The estimated surplus for all closed years was $1,029m (up from $1,032m at the start of the policy year). A decrease of $3m in the surplus on closed years was mostly due to increases in the claims estimate for the 2015 policy year, the Club said.
Open policy years 2016 to 2019 were estimated to have a surplus of $155m as at August 20th 2019.
The Last Instalment for mutual Members has been set at zero in respect of the 2016 policy year and the 2017 policy year, representing in each case a 20% reduction in the ETC for mutual Members. Gard said that the estimated result for the 2016 policy year had improved over the last six months, while the estimate for the 2017 policy year had deteriorated. 2016 is being closed without any further calls and the same is anticipated next year for policy year 2017
For 2018 the ;ast instalment was levied in September, representing a reduction of 10% in the ETC. Gard said that the estimated result had deteriorated over the past six months, but that the policy year was expected to be closed in November 2021 without levying any further calls.
During the first six months of the 2019 policy year Gard said that there had been a decrease in claims incurred compared to the same period of the 2018 policy year. The number of claims reported was up by 2%. As at August 20th claims incurred for the 2019 policy year were 4% below expectation. The estimated Last Instalment for the policy year is 20 per cent of ETC.
SUMMARY INCOME STATEMENT
|Amounts in USD 000s||H1 to 20.08.19||H1 to 20.08.18|
|Gross written premium||710,023||667,580|
|Gross earned premium*||399,532||374,060|
|Earned premium for own account||318,944||305,312|
|Other insurance related income||1,480||1,291|
|Claims incurred for own account**||265,876||194,935|
|Combined Ratio Net (CRN)||96%||78%|
* Gross earned premium include one half of estimated total calls for the P&I business and gross earned premium for the marine and energy business.
** Claims handling costs’ share of Operating expenses are included in Claims incurred for own account.
***Taxation and Other comprehensive income/(loss) are included in Non-technical result.