The Swedish Club has reported an underwriting result of minus $2.2m for the first half, compared with a gain of $4.7m in the same period last year. However, solid investment returns meant that the result before appropriations, tax and discount was $16.9m, representing an annual return on free reserves of 16.6%, up from $200,000 in H1 2018.
The combined ratio was 108% for H1, up from 96% in H1 2018. Retained claims developed largely in line with expectations and the Club incurred no significantly large Marine or P&I claims.
However, although the Club did not itself notify any claim to the IG Pool, other clubs’ Pool claims pushed the combined ratio of the Club above 100%.
On the investment side both dollar- and euro-denominated interest-bearing debentures gained value, following a fall in interest rates. Equity holdings benefited gains in stock markets. The Club’s investment portfolio delivered a return of 6.3%, compared with a loss of 0.4% in the same period last year. The reported financial result as a gain of $19.0m, compared with a loss of $4.5m in the same period last year.
Six months to 30 June 2019 (unaudited)
|Amounts in USD millions||H1 2019||H1 2018|
|Gross premiums earned||72.8||72.5|
|Premiums net of reinsurance||55.1||55.6|
|Investment income transferred from NTA||2.1||2.7|
|Claims net of reinsurance||-47.6||-41.7|
|Net operating expenses||-11.8||-11.9|
|Result before appropriations, tax and discount||16.9||0.2|
Managing director Lars Rhodin said that the Club continued to grow according to plan. Although the combined ratio was 108% (the result of other clubs’ International Group Pool claims) on a 10-year average the combined ratio remained below 100%. Free reserves were $221m, up from $210m.
Rhodin said that an S&P ratings upgrade was “a recognition of what we believe we already had in place – quality members and operating stability”.