Group Club update from broker Tysers: 2021-22: #5 London Club

In its update on the performance of the International Group sector and individual clubs in 2021-22, Tysers was unimpressed with London Club’s figures, going so far as to call it a “disastrous” year for London Club.

Gross premiums rose by 11% to $133m (excluding the unbudgeted supplementary calls for 2019-21 totalling $82m), but the Club suffered 14 claims of more than $1m, totalling a net $66m. This compared to an average of six over the previous five years, usually costing $20m to $25m a year.

The X-Press Pearl casualty off Sri Lanka has become the Club’s most expensive claim ever, easily moving into the International Group Pool and going above that into the Group’s Excess Loss reinsurance programme.

In addition, Covid- related claims rose from $3m in 2020 to more than $11m in 2021.

Net claims totalled $154m, up form $120m in 2020 (net of reinsurance recoveries of $267m).

Investment returns were minus $4m.

Tysers said that “without the additional calls announced in October 2021 of 35% for 2019 and 2021, and 30% for 2020, the operating loss would have been $66m. The calls enabled an overall surplus of $10m to be achieved, pushing free reserves up to $166m.

Possibly a partial knock-on effect from the unbudgeted calls was that owned tonnage declined from 53m gt in 2021 to 45m gt at the 2022 renewal, although chartered tonnage remained stable.

Chairman John Lyras reported that the Board has carried out a review of measures to achieve viable underwriting results and of other strategic issues such as product development and resources in key market areas, and that the Board was also looking at how to improve work efficiency.

Tysers said that “our suggestion would be a phone call to Skuld to see if it fancies a “merger””.

Managers

A Bilbrough & Co Ltd

Year 2022 2021 2020 2019 2018
Calls/Premium 214,848 119,497 116,175 103,660 101,728
Reinsurance Cost 21,019 19,529 18,502 19,671 20,393
Net Claims (incurred) 154,232 120,194 118,680 104,019 83,902
Operating Expenses 24,867 16,489 15,093 13,644 12,655
Net Underwriting Result 14,730 (36,715) (36,100) (33,674) (15,222)
Gross Outstanding Claims 591,969 352,225 334,851 326,160 298,144
Total Assets 809,311 545,036 526,501 511,570 512,840
Average Expense Ratio 11.95% 10.46% 10.41% 10.30% 9.68%
Solvency Margin 1.37 1.55 1.57 1.53 1.72
Reserves/GT Ratio $3.69 $3.08 $3.43 $3.30 $4.29

All figures $000s

Gross Tonnage

Owned 44,500,000
Chartered 20,000,000

Standard & Poor’s Rating – BBB

Free reserves

2022 164,003,000
2021 153,571,000
2020 173,891,000
2019 168,843,000
2018 194,642,000

Tonnage by vessel type

Bulkers 52%
LNG/LPG & Tankers 26%
Container 18%
Cargo 4%

Tonnage by geography is equally split between Asia and Europe, with 1% from the Americas.