The Swedish Club has reported a “positive underwriting performance” for the first half of policy year 2022/23, with an overall combined ratio running at 91%.
The Club said that the “significant improvement” in 2022 had seen last year’s volatility being replaced by “a more stable claims environment”.
“Overall, premium adequacy continues to improve, and focus on quality has led to fairly stable growth, accompanied by a small increase in the Marine portfolio”, the Club said.
Swedish Club put in a 12.5% general increase for 2022/2023 and obtained a 94% retention rate.
The Club said that P&I and Marine markets were “currently fairly stable” and felt that premium levels were “more likely to harden than to decline”. It said that this would be driven by the impact of inflation, of which increased transportation cost formed a part.
However, it was observed that, while inflation propped up prices, while running at 8% to 9% in many countries it would also likely have an impact on future claims. “The industry normally sees a rise in the cost of claims when shipping markets are buoyant, and the current booming container and dry bulk markets are unlikely to prove an exception”, the Club said.
The situation in Ukraine had generated uncertainty and an additional workload when it came to ensuring sanctions compliance. “Sanctions schemes are complex, and due diligence is required by both shipowners and underwriters. Even legal trade is difficult to transact in view of the declining risk appetite from the banking system”, the Club said.
The Club applauded the Black Sea Grain Initiative, noting that it was “good to see vessels that have been trapped in Ukraine for nearly six months leaving with much-needed shipments of grain”. It noted that it was “currently dealing with many enquiries regarding trading vessels in the area again”.