In advance of the release of detailed results, Steamship Mutual has reported that, as of February 20th 2021, free reserves remained in excess of $511.1m “despite the challenges presented in 2020”. This compares with a figure of $515.3m 12 months earlier.
At renewal approximately 5.7m gt of new tonnage entered the Club from both existing and new members.
2021 opening entered tonnage stood at 177 million GT, up from 157m the previous year (as recorded in management highlights, 2019-20).
The Club achieved a 4.5% increase on renewing owned business.
International Group Pool and Covid claims raised the combined ratio to 125.4%, higher than had been anticipated. The previous year’s CR had been 99.8%, and the rolling six-year average combined ratio rose from 92% to 99.2%.
The investment return of $ 54.2m, representing a 4.8% return, compared with $66.9m the previous year.
The Club noted that its capital remained “comfortably in excess of the S&P AAA rating level”.
Release call levels were unchanged.
The Directors noted the pressure on the underwriting performance from higher than expected Pool claims, both in the 2020 policy year and in prior years, and Covid related claims. These two aspects apart, all other claims for the 2020 policy year were broadly in line with, or better than, budget, the club said.
Club Chairman Armand Pohan said that “even if balance is unlikely to be achieved every year, it remains a reasonable objective and the measure of underwriting achievement. In the last financial year, the Club experienced the effect of the worldwide pandemic, and made appropriate provision for it. 2020/21 was extraordinary in this respect, as well as in many others, and the combined ratio outcome for that year results from two factors. First, the necessity to take a conservative approach towards projected pandemic claims. Second, the effect of claims in the IG pooling layers which were experienced at record levels. These factors resulted in a higher combined ratio than would otherwise have been the case, and the directors required a 5% general increase for the 2021/22 year”.