Steamship reports growth in gross tonnage, plus 5.5% investment return

At Steamship Mutual’s Board Meeting in Seoul, South Korea on Monday February 4th, the Directors reported a continued growth in the Association’s owned entry from February 20th 2019 to January 20th 2020. An additional 3.9m gt increased the Club’s combined owned and chartered entry to more than 165m gt.

In the 11 months ending January 20th the Club recorded a 5.5% investment return of $58m (excluding the impact of FX movements).

Despite some positive claims developments over the course of the current year, the Club is forecasting a combined ratio in excess of its target of 100%. The General Increase ordered last October is intended to address this issue and restore underwriting balance.

The Club said that, compared with the first half of the year, claims development for the second half of 219/20 so far had been favourable. After 11 months of development, attritional claims remain stable and large losses (those estimated in excess of $250,000) were now in line with the average of the previous five years.

Pool claims affecting all Clubs in the International Group are at similar levels to those of 2018/19, at the same point of development, and higher than in previous years. Steamship warned that it was “quite possible that this indicates an upward trend in the cost of claims in the pool.

For 2018/19 and Prior Years the Club’s own prior year claims, within its retention, have developed more favourably than projected over the 3rd quarter ending 20th November 2019; whilst the Club’s exposure to pool claims is in line with projections.

Armand Pohan, Club Chairman, said that “we welcome the Club’s continued growth over the third quarter, reflecting Steamship’s financial strength and high levels of service. Nevertheless claims are somewhat higher now than two years ago and at this renewal premium levels are being adjusted accordingly. The Directors will in due course consider whether a further distribution of capital can be made”.

Pohan noted that in a few days, the newly formed Europe Club will be underwriting our European business from Limassol, providing the same levels of cover, financial security and service as the London based Club.”

He said that the Club’s renewals were proceeding satisfactorily.