“Not a bad year overall”, says Tysers of North’s 2020-21 result

Broker Tysers has now released its annual assessment of the P&I Market and, in particular, the International Group Clubs. IMN will be summarizing the individual clubs over the coming days, concluding with a combined summary of the club’s financial performances, conditions, rankings, ratings etc.

Today: North

Self-managed

Gross Tonnage

Owned 158,000,000
Chartered 90,000,000

Free reserves

2021 450,300,000
2020 443,810,000
2019 463,037,000
2018 450,462,000
2017 430,755,000

Standard & Poor’s Rating:         A

Tonnage by type

Bulkers 40%
Tankers 24%
Containers 22%
Other 14%

Tonnage by Geography

Europe 36%
Asia-Pacific 35%
Middle East 11%
Americas 6%
Scandinavia 14%

Tysers observed that North felt it was making good progress, with diversification helping to improve overall results. Premium income rose by nearly $60m to $406m. While the combined ratio of 114% was an improvement on the previous year’s 126%, it still meant an underwriting loss of $45m, (-$68m the previous year). It was the fourth year running that the combined ratio exceeded 100%.

Tysers noted that North felt that diversification helped the Club to absorb their financial year contribution of $90m to Pool claims, incurred despite having no Pool claim itself in 2020. North pointed out that North “gave the Pool a battering in 2019”.

For the 2020/21 policy year, retained claims after 12 months were down $36m on the previous year. North felt that this was due to less activity during the pandemic. The Club saw a return to current trends towards the end of the year, and this had continued into 2021/22.

North achieved its best investment return for many years, at 6.67%. This produced $63m (net of a small revaluation of the Club’s land and buildings) and after adjustment for an $11m pension deficit, the Club delivered a net surplus for the year of nearly $7m, pushing free reserves to just over $450m.

Tysers termed this “not a bad year overall”, but said that it would be watching how the Club’s diversification developed over the next year. Tysers concluded that “we do feel we can expect a general increase for 2022 towards the top end of the scale”.

Figures include all lines of business   All figures $’000

Year 2021 2020 2019 2018 2017
Calls/Premium 406,159 346,567 345,019 387,599 428,348
Reinsurance Cost 79,822 65,512 61,701 81,326 98,389
Net Claims (incurred) 301,885 274,490 227,138 243,944 246,013
Operating Expenses 69.456 74,715 68,868 77,410 75,698
Net Underwriting Result (45,004) (68,150) (12,688) (15,081) 8,248
Gross Outstanding Claims 1,288,182 1,256,282 836,932 826,053 865,610
Total Assets 1,930,274 1,873,184 1,429,786 1,413,731 1,494,210
Average Expense Ratio 13.60% 13.70% 12.70% 12.10% 12.00%
Solvency Margin 1.50 1.49 1.71 1.71 1.73
Reserves/GT Ratio $2.85 $2.77 $3.15 $3.17 $3.08