Tysers 2020 Marine Liability Report – The Clubs: #3, Gard P&I (Bermuda)

Managers: Gard AS

Gross Tonnage

Owned 244,700,000
Chartered 95,000,000

Free reserves

2020 1,179,200,000*
2019 1,158,391,000*
2018 1,248,567,000*
2017 1,134,400,000*
2016 1,016,697,000*

* are Group figures and include all business lines, not just P&I.

Tonnage By Vessel Type

Tankers & Gas 38%
Bulkers/OBO 28%
Containers 16%
Dry Cargo 6%
Passenger/Cruise/MOU/Other 12%

Tonnage By Area

Asia 28%
Norway 15%
Other Europe 16%
Germany 8%
Greece 19%
Americas 11%
Middle East 3%

Tysers reported that Gard had decided to defer a decision on whether to charge its last P&I instalment for 2019 until later in 2020.

“This 20% instalment is worth around $72m and, given the underlying strength of the Club, it is a fair bet that members will not have to pay it in full”, predicted Tysers.

The technical result was a combined ratio of 102% (114% if no final instalment) compared with 110% last year. The investment return of $118m (5.8%) helped free reserves increase by $20m without the final instalment, or by $93m on an ETC basis. By segment, the ETC P&I combined ratio was 106%, the same as 2019, while Marine & Energy improved to 93%, from 118% the previous year.

ETC P&I gross premium was flat at $519m, but claims increased by $66m to $405m. This was due to increased Pool claims.

Tysers noted the statement of Gard chairman Morten Hoegh: “Gard’s diversification strategy enables us to balance a small loss on our mutual business with a profit from our for-profit insurance businesses.”

Tysers observed that “more traditional Clubs will be horrified to see the word “profit” used in a Club’s annual report, but diversification can work to the benefit of mutual members – you just have to know how to do it!”

Tysers also observed that, “not for the first time, Gard is somewhat critical of the International Group, warning that shipowners require and expect greater support and faster change on how insurers deliver risk transfer solutions”.

Results

Year 2020 2019 2018 2017 2016
Calls/Premium 442,052 481,130 467,425 531,474 607,260
Reinsurance Cost 97,890 102,296 106,201 117,371 137,214
Net Claims (incurred) 405,015 338,538 357,388 325,585 351,938
Operating Expenses 38,831 102,190 45,490 52,147 50,494
Net Underwriting Result (99,864) (61,894) (41,654) 37,693 67,614
Gross Outstanding Claims 1,381,122* 1,409,646* 1,338,266* 1,445,660* 1,572,498
Total Assets 2,881,429* 2,858,758* 2,867,126* 3,047,131* 3,012,936*
Average Expense Ratio 12.81% 13.04% 11.21% 12.02% 11.83%
Solvency Margin 2.09* 2.03* 2.14* 2.11* 1.92*
Reserves/GT Ratio $4.82* $5.05* $5.59* $5.24* $4.72*

* are Group figures and include all business lines, not just P&I.