Shipowners’ Club said on Friday that it anticipated an underwriting result close to breakeven for the year. It noted that in its Half Year Report it reported a 99.3% combined ratio. During Q3 there had been ongoing pressure on income, with claims activity continuing in line with H1. This included an increased level of Pool claims reported by Clubs to the International Group. Shipowners’ said that this could be an indication of an uplift in global claims activity and a returning to higher utilization in shipping.
Return on investments had been ahead of expectations; as a result an overall surplus was expected for the full year.
Looking ahead to 2018, the Club expected premium income and claims broadly to be in line with 2017. However, it anticipated that the strengthening of sterling against the US dollar would impact expenses incurred in managing the Club.
The Club is the first to observe that the significant number of natural catastrophes this year were likely to cause a slight hardening of the reinsurance market and might therefore have a knock-on effect on the P&I clubs. “Such factors will inevitably place pressure on achieving a technical underwriting balance for 2018. Therefore at present, the Club anticipates a small underwriting deficit on the 2018 financial year”, the Club said.
The Club said that it owuld utilize encouraging investment returns to subsidize the underwriting position. This action, it said, was “essentially returning capital to Members by providing insurance at below cost”. No General Increase for 2018 will be applied, inclusive of any adjustment for reinsurance premiums.
As with all previous renewals, individual Members’ claims records and operational risks will be reviewed, applying commensurate premium and deductible increases. The Club said that its policy of applying ship inspections and management audits would also remain.