Norway-based marine insurer Gard has said that it would not be applying a general increase for policy year 2022/23, and said that an improvement in the financial and insurance result since August 20th meant that there would be an Owners’ General Discount (OGD) of 5% on the agreed Estimated Total Call (ETC) for the 2022 policy year.
Gard said that, as at August 20th 2021 and on a
consolidated basis, the financial position of Gard P&I (Bermuda) Ltd and
its subsidiaries remained strong, with its A+ rating confirmed by Standard and
(S&P has put many Clubs on a negative outlook because of the significant growth in Pool claims.)
Gard said that this was despite its half-year result being negatively affected by major claims falling within the International Group Pool, the continued impact of Covid-19, and an increase in own claims.
- Total equity for the Gard group was $1,226m, down from $1,263m as at February 20th 2021).
- The net result after tax on an ETC basis was a total comprehensive loss of $50.2m, with a Combined Ratio Net of 113%.
- The investment return on a group basis was $30.4m.
- GWP on a consolidated basis was $717.7m.
The Board said that premiums would have to be increased for P&I for the 2022 policy year to achieve a balanced underwriting result for owners P&I going forward. Although there would be no general increase applied across the portfolio, individual Members’ rates would be adjusted to reflect their risk profile and claims record. Gard did not say at what percentage these increases would ” average out” .
Gard also warned that it anticipated that International Group reinsurance rates would increase and that the increase would be passed on to Members in accordance with usual practice.
Echoing the comments of other Clubs, Gard noted that, after a long period of a benign claims experience and corresponding reduction in premium levels, the last few years had seen an increase in the severity of claims. This had been accompanied by a stagnation in the reduction in claims frequency.
As a result of the negative claims development, Members could expect an increase in the ETC for owners mutual P&I at the 2022 renewal.
Open policy years
2019 policy year: The year is expected to be closed in October 2022 with no further calls, which is 5% below original ETC.
2020 policy year: The year is expected to be closed in October 2023 with no further calls, which is 10% below original ETC.
2021 policy year: The year was underwritten with a 5% Owners’ General Discount (OGD) on the ETC. The ETC less the OGD should be maintained.
- 2019 policy year: 5%
- 2020 policy year: 5%
- 2021 policy year: 10%
- 2022 policy year: 10%
(The term ” consolidated” means the consolidated accounts of Gard P. & I. (Bermuda) Ltd., Assuranceforeningen Gard – gjensidig, and their subsidiaries.)