Steamship probably pleased with growth in tonnage, says Tysers

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: Steamship Mutual Underwriting Association Ltd

Managers:    Steamship P&I Management LLP

Gross Tonnage

Owned 96,000,000
Chartered 81,000,000

Free reserves

2021 511,064,000
2020 515,342,000
2019 467,049,000
2018 515,968,000
2017 510,290,000

S&P Rating  ‘A’

Tonnage By Type

Bulkers 35%
Tankers 24%
Container 22%
Cruise Ship/Ferry 11%
General Cargo 5%
Other 3%

Tonnage By Geography

Far East 39%
Europe 40%
North America 15%
Latin America 2%
Middle East/India 4%

Tysers said that it was not surprising to see Steamship Mutual Chairman Armand Pohan prefer to highlight another solid investment return of $54m and an average combined ratio for the last six years of 99%, rather than the underwriting performance for 2020/21, which saw a combined ratio of 125% and an underwriting loss of $59m.

The broker observed that “this performance was due to Pool claims and to the necessity to take a conservative approach towards projected pandemic claims”. Overall, the Club was thought to be probably quite happy with a reduction in free reserves of just $4m to $511m, which remained in a very healthy position.

Tysers praised the Club’s decision not to make a capital distribution this year, in order to accommodate potential volatility.

Gross premium fell by $25m year on year to $284m. Tysers imagined that to a large extent this was due to inactivity in its large passenger vessel sector, “where the Club did its utmost to help cruise operators through very difficult times”.

Net incurred claims rose by $35m to $253m, while prior year releases of reserves were less than budgeted, due to adverse developments on two large claims.

For the 2020/21 policy year, Covid net retained claims totalled $27m and included two claims on cruise vessels which hit the Pool, although the Club’s exposure was limited as the insurance was on a quota share basis.

The Club suffered one further Pool claim, relating to pollution consequent on the loss of containers overboard.

After four years of little growth, Tysers felt that Steamship would be pleased that owned tonnage last year increased by 8m to 96m GT, while its substantial chartered entries grew from 68m GT to 81m GT.

Tysers said that it was somewhat surprising that the Club was still only in 9th place in the IG on owned tonnage.

All figures $’000

Year 2021 2020 2019 2018 2017
Calls/Premium 284,405 308,725 306,661 295,318 305,642
Reinsurance Cost 50,773 48,389 50,522 52,089 56,033
Net Claims (incurred) 252.735 218,027 246,358 241,369 168,455
Operating Expenses 40,307 40,780 41,623 40,570 39,219
Net Underwriting Result (59,410) 529 (31,842) (38,710) 41,935
Gross Outstanding Claims 955,538 821,204 827,408 830,826 765,386
Total Assets 1,507,197 1,381,712 1,343,120 1,378,037 1,301,995
Average Expense Ratio 11.90% 12.10% 12.40% 12.20% 12.10%
Solvency Margin 1.58 1.68 1.62 1.66 1.70
Reserves/GT Ratio $5.32 $5.83 $5.46 $6.06 $6.03