Tysers 2020 Marine Liability Report – The Clubs: #10, Steamship Mutual

Steamship Mutual Underwriting Association Ltd

Managers – Steamship P&I Management LLP

Standard & Poor’s Rating – A

Gross Tonnage

Owned 88,400,000
Chartered 68,100,000

Free reserves

2020 515,342,000
2019 467,049,000
2018 515,968,000
2017 510,290,000
2016 440,321,000

Tonnage By Vessel Type

Bulkers 35%
Tankers 24%
Container 20%
Cruise/Ferry 12%
General Cargo 6%
Other 3%

Tonnage By Area

Far East 39%
Europe 38%
North America 16$
Middle East/India 5%
Latin America 2%

Tysers noted that Steamship Mutual had turned around quickly the disappointing results for 2018/19, producing “what it correctly describes as a market-leading performance for 2019/20”.

A combined ratio just on the right side of 100% (i.e. underneath) and net investment income of $64m saw free reserves grow to $515m, after a capital distribution to renewing members of $16m.

The Club has now returned capital totalling $90m over the past four years.

Owned gross tonnage (gt) grew by 2.8m gt to 88.4m gt, but chartered tonnage reduced from 74m gt to 68m gt due to the loss of one substantial account. This meant that total tonnage reduced from 160m gt to 156m gt.

Gross premium was up $2m at $309m, while net incurred claims reduced by $28m to $218m. The Club suffered 54 claims in excess of $250,000, down from 67 in the previous year although the total value of these claims remained similar at $106m. There were three claims that were large enough to hit the Pool.

Claims on the Club’s substantial chartered book reverted to more normal levels, with four large claims totalling $3m compared to 15 totalling $42m in 2018/19.

Tysers observed that chairman Armand Pohan had warned that the Club’s reserves might be adversely impacted in 2020/21 by the consequences of Covid-19. The broker said that the Club’s large cruise ship portfolio likely would have had its fair share of claims. There would also perhaps be an impact on premium income because many cruise ships have been laid up and several had been sold.

Pohan said that “the Club accumulates reserves in order to absorb and help shield its members from all kinds of financial shocks, including those that are unexpected”

Tysers expected Steamship Mutual to weather the storm of 2020 quite comfortably “and, despite its obstinate monoline conservatism, it remains an attractive option”.

Year 2020 2019 2018 2017 2016
Calls/Premium 308,725 306,661 295,318 305,642 350,329
Reinsurance Cost 48,389 50,522 52,089 56,033 64,830
Net Claims (incurred) 218,027 246,358 241,369 168,455 167,930
Operating Expenses 40,780 41,623 40,570 39,219 41,397
Net Underwriting Result 529 (31,842) (38,710) 41,935 76,172
Gross Outstanding Claims 821,204 827,408 830,826 765,386 908,028
Total Assets 1,381,712 1,343,120 1,378,037 1,301,995 1,372,979
Average Expense Ratio 12.10% 12.40% 12.20% 12.10% 12.10%
Solvency Margin 1.68 1.62 1.66 1.70 1.51
Reserves/GT Ratio $5.83 $5.46 $6.06 $6.03 $5.66

All figures $’000