Investment loss deepens overall deficit at Standard Club, but CR improves

Standard Club reported a comprehensive income of minus $50m for policy year 2021-22, compared with a loss of $33m the previous year. The balance on the technical account improved from a loss of $62m to a loss of $14m, but investment income swung from a gain of $29m to a loss of $36m.

Calls and premiums net of reinsurance rose to $230m, from $228m, while claims net of reinsurance and operating expenses declined to $244m, from $290m.

Pool and reinsurance recoveries amounted to $37m (2021: $44m).

Of the $238.5m of calls and premiums on the 2021 P&I policy year, $60.3m represents non-poolable business which is all fixed premium. The comparative figures for 2020 are $241m and $60m, and for 2019 they are $241m and $59m.

The total balance sheet funds fell to $853m, from $946m.

Total estimated claims liabilities (known plus IBNR) fell to $543m, from $586m.

In its just-published Annual Report 2022, revealing a significant improvement in its combined ratio. In 2021/2022 the club noted that its combined ratio improved to 105% on gross premiums of $294m (2021: $293m), compared with a 2020/21 ratio of 121%.

The net aggregate of Covid-19 claims notified up to February 20th 2022 across all classes of business amounted to approximately $36m.

The club noted that a defensive investment strategy (53.5% government bonds, only 5,4% in equities) had limited the impact on the club’s finances, with a return on investments dropping to -1.2%. It noted that, at $310m its free reserves (total balance sheet funds minus estimated claims liabilities) were still well in excess of regulatory requirements.

On May 27th Club members backed the proposed merger between Standard Club with North, which will come into full force for the 2023/24 policy year.

Chief Executive Jeremy Grose said that the improvement in the combined ratio was “thanks to our strategy of attracting carefully selected tonnage from international shipping centres, despite 2021/22 being a heavy year for pool claims. 2022/23 looks set to be another successful year and we are pleased to see the good progress of our Coastal & Inland business in Asia which launched earlier this year.”

As of February 20th 2022 overall tonnage stood at 158m gt (2021, 149m gt). Premium and call income are forecast to be $350m in the new financial year.

As of February 10th Standard Club’s owned tonnage was allocated as follows:

Container 30%
Tanker 27%
Dry Bulk 21%
Offshore 18%
Passenger 2%
Other 2%

Owned tonnage was diverse, split 57% Europe, 24% Asia-Pacific and 19% ROW. Within those broad categories Greece contributed 13%, Japan 8% and the USA 6%.

https://www.standard-club.com/fileadmin/uploads/standardclub/Documents/Import/publications/annual-reports/2022/The_Standard_Club_Ltd_Annual_Report_and_Financial_Statements_2022.pdf