Steamship Mutual goes for 7.5% general increase for 2023-24, deductibles rise

Despite a generally positive report for the first half of the 2022-23 policy year, Group Club Steamship Mutual has announced a 7.5% general increase for the policy year 2023-24. Steamship Mutual is the first of the Group Clubs to announce its pricing intention for next year.

The Club noted that its own incurred claims for the first half of the policy year had been less than budgeted, with no material claims arising from Covid-19. In addition there have been no reported claims on the IG Pool for the first six months of the policy year. Steamship said that, while this was no guarantee that there would not be any claims for the full year, such a benign first half made it unlikely that Pool claims would be as high as they had been in recent years. It also noted that the development of prior year IG Pool claims had been greater than expected.

For 2021/22 and prior years at six months the overall development of the Club’s prior year claims was higher than projected, primarily because of the deterioration in Pool claims.

For investments in the seven months ending September 2022 the Club recorded a loss of 4.4 %, excluding currency movements, amounting to a loss of $51m. This loss is currently mainly unrealized as it relates largely to changes in interest rates suppressing the price of already held bonds.

Steamship Mutual said that, while underwriting performance for the first six months in 2022/23 was better than expected, the Board recognized the need for caution when projecting claims levels. The Board has decided that there should be a general increase of 7.5% in premium ratings for all classes of business.

As is usual, the Managers have been instructed to correct individual Member premium ratings where necessary and to pass on to Members any adjustments in the costs of the IG reinsurance programme.

The Board has also ordered a 10% increase in Class 1 P&I deductibles to apply to all deductibles which are $50,000 or less.

The Board noted the Club’s continuing financial strength and robust capital position, but concluded that “it would not be appropriate to order a capital distribution at this time, given the volatility that effects the Club’s investments.”

The Directors decided to maintain the level of release calls, for mutual Class 1 P&I and Class 2 FD&D entries, as follows:

  • 2020/21: 12.5%
  • 2021/22: 12.5%
  • 2022/23: 15%

The release call for the 2023/24 policy year will be set at 15%.

Steamship Mutual reported continued growth in the Club’s owned entry, which was up by 3.5% in tonnage terms for the period February 20th to September 20th 2022, increasing the owned entry to over 114m gt and the combined owned and chartered entry to over 200m gt.