Group Club update from broker Tysers: 2021-22: #6 North

Broker Tysers noted that for policy year 2021-22 North of England Club reported an improvement in many financial performance indicators. Premiums rose by $23m to $429m, while claims were down by $20m to $282m. The combined ratio improved from 114% to 107%, with mutual P&I at 106% and the Sunderland Marine Fixed P&I at 90% for a third consecutive year. Meanwhile, owned tonnage rose by 4m to 160m gt, with chartered tonnage stable at 90m gt.

North stated in its annual report that performance across all business lines was “robust”, particularly Hull and Fixed premium, which delivered to plan in terms of income growth and underwriting performance.

The accounting position of the Club’s pension scheme, a long-running thorn in the Club’s side, improved by $26m.

However, Tysers noted that in contrast to last year when an investment return of $63m (6.67%) pushed the Club to an overall surplus, 2021 saw an investment loss of $20m (-1.75%). The underwriting loss was $23m, and the overall deficit of $17m saw free reserves fall back to $434m, their lowest since 2017 and the equivalent of $2.68 per owned gt – “better than Standard’s $2.39, but still not entirely comfortable”.

Tysers said that the other downside was an increase of $45m in retained claims for the 2021 policy year compared to 2020. This was mainly due to Covid-related claims, but there was also an increase in claims over $1m, from 32 to 37, with two hitting the Pool.

Tysers said that the forthcoming merger with Standard Club had the broker’s support and, if handled properly, would improve long-term financial stability for both.

Year 2022 2021 2020 2019 2018
Calls/Premium 429,025 406,159 346,567 345,019 387,599
Reinsurance Cost 82,161 79,822 65,512 61,701 81,326
Net Claims (incurred) 282,010 301,885 274,490 227,138 243,944
Operating Expenses 87,623 69.456 74,715 68,868 77,410
Net Underwriting Result (22,769) (45,004) (68,150) (12,688) (15,081)
Gross Outstanding Claims 1,146,110 1,288,182 1,256,282 836,932 826,053
Total Assets 1,803,880 1,930,274 1,873,184 1,429,786 1,413,731
Average Expense Ratio 15.20% 13.60% 13.70% 12.70% 12.10%
Solvency Margin 1.57 1.50 1.49 1.71 1.71
Reserves/GT Ratio $2.68 $2.85 $2.77 $3.15 $3.17

Gross Tonnage

Owned 162,000,000
Chartered 90,000,000

Standard & Poor’s Rating          A

Self-managed

Free reserves

2022 433,700,000
2021 450,300,000
2020 443,810,000
2019 463,037,000
2018 341,726,000

Tonnage by vessel type

Bulkers 40%
Tankers 21%
Containers 23%
Other 16%

Tonnage By Geography

Europe 36%
Asia Pacific 34%
Middle East 11%
Americas 4%
Scandinavia 15%