Tysers 2020 Marine Liability Report – The Clubs: #12, UK Club

The United Kingdom Mutual Steam Ship Assurance Association (Bermuda) Ltd

Manager – Thomas Miller

Standard & Poor’s Rating – ‘A’

Gross Tonnage

Owned 142,000,000
Chartered 100,000,000

Free reserves

2020 559,194,000
2019 504,793,000
2018 539,980,000
2017 458,377,000
2016 447,844,000

Tonnage By Vessel Type

Tankers/Gas 41%
Bulkers 35%
Container 13%
Other 11%

Tonnage By Area

EMEA 54%
Asia-Pacific 36%
Americas 10%

Tysers congratulated UK Club on its “excellent investment return of 9.6%” which contributed $106m to the reserves. Elsewhere for the Club it was a quiet year. There was no tonnage growth, gross premium was down $17m to $305m and net incurred claims were stable at just over $250m.

The underwriting loss was $51m which, when combined with the investment return, meant that free reserves grew by $54m to $559m.

The combined ratio of 120% was the hghest for many years and, said Tysers, was “well outside the acceptable range”. A late deterioration on 2017 policy year claims and other deterioration in old occupational disease claims were reported as adding 10% to the combined ratio. UK Club has now protected the position on the latter by means of specific reinsurance. The Club has said that, with its conservative approach to claims estimating, the combined ratio was likely to improve over time as claims reserves were released.

The Club attributed its lack of tonnage growth to its disciplined approach to underwriting, with a refusal to quote on 12m gt of potential new business during the year. Tysers said that UK Club was “dropping clear hints that premiums must rise next year, and we shall be following closely the Club’s progress during the very different circumstances of 2020”. ■

Year 2020 2019 2018 2017 2016
Calls/Premium 305,037 322,398 361,793 376,170 385,360
Reinsurance Cost 60,386 64,860 65,119 81,082 81,414
Net Claims (incurred) 251,707 250,941 225,700 273,619 241,252
Operating Expenses 43,724 43,654 34,542 51,310 43,378
Net Underwriting Result (50,780) (37,057) 36,432 (29,841) 19,316
Gross Outstanding Claims 957,030 984,145 986,236 924,537 969,305
Total Assets 1,533,085 1,506,871 1,640,168 1,515,268 1,550,462
Average Expense Ratio 11.28% 11.09% 10.31% 10.22% 10.28%
Solvency Margin 1.60 1.53 1.66 1.64 1.60
Reserves/GT Ratio $3.94 $3.51 $3.88* $3.30* $3.32*

All figures $’000