The Shipowners’ Club has reported a 98.1% combined ratio for the first half of the year to June 30th, which it said was “ahead of expectations”.
Shipowners’ generated an overall surplus of $11.8m, increasing free reserves to $291.2m. Positive returns on the investment portfolio were “a key contributor to the financial result.”
Earned premiums reached $112.8m, while claims costs came in at $72.7m. The technical result was plus $1.9m.
The $550m investment portfolio of US$ 550m has about 75% in cash and fixed income products, and 25% in equities. It generated a gross return of $11.2m, an annualized return of 4%.
Claims frequency was up year on year, “with a small increase in the quantum of claims reported within bands up to $1m”.
However the overall quantum of claims was 29% down compared with the same period last year. The was mainly because of a 31% fall in the value of the claims reported within the $1m to $5m band.
The Club has decided that no general increase will be applied to premiums for the 2017 policy year. “This will be the third consecutive year in which no general increase has been applied”, the Club said.
CEO Simon Swallow noted that the results were strong given challenging market conditions. “Ongoing low oil prices, combined with a deceleration in Chinese economic growth and an over-supply in shipping across the globe have brought challenges for our Members”, he said.