Tysers 2020 Marine Liability Report – The Clubs: #7, Shipowners

The Shipowners Mutual Protection & Indemnity Insurance Association (Luxembourg)

Managers – The Shipowners’ Protection Ltd

Standard & Poor’s Rating   A

Shipowners’ Club reported a “satisfactory” set of results for the 2019 calendar year, said broker Tysers in its annual marine liability report on the P&I Clubs and fixed premium operations.

The combined ratio of 105% was the second year running that the Club had reported a technical loss – $10.3m for 2019 and $8.2m in 2018, but Shipowners’ Club said that this was in line with budget.

An “excellent” investment return of 9% brought in $46.4m net of tax, helping free reserves to rise by $36m, thus recovering nearly all the 2018 losses.

Approaching 80% of the Club’s funds are invested in fixed income instruments.

Entered tonnage remained stable at just over 27m gt, with the Club enjoying a member retention rate of 98%. Growth was seen mainly in the passenger, yacht and fishing sectors.

Tysers observed that, as the fixed market offerings continue to dwindle, the Club reported that, for the first time, competition now came more from other Clubs in the International Group.

Tysers said that the Club did not appear too concerned about this, citing the fact it has been insuring small vessels for 160 years and so knew what it was doing when it came to claims and to administering a portfolio of nearly 8,000 members and more than 33,000 vessels.

The Club was now insuring a small but growing number of autonomous vessels, operating mainly in inshore/ offshore survey and fishery research. The Club had noted that these vessels were generally very small, but the Club felt that larger and more mainstream applications were not far away.

Tysers said that Shipowners’ was at the forefront of this emerging sector, working with industry experts to ensure it fully understood the related liabilities and provided the comprehensive cover required.

Net incurred claims in 2019 were up just over $5m at $156m and earned premium net of reinsurance rose by a similar amount to $200m. Although the Club did not note any particular claims trend, it did see “convention creep” pushing up claim values.

During the year the Club celebrated 10 years of its Singapore branch, which now employs over 40 staff to help service its substantial Asian book, and also opened a service office in Greece.

Gross Tonnage

Owned 27,100,000
Chartered N/A

Free reserves

2020 339,974,000
2019 303,825,000
2018 341,726,000
2017 294,041,000
2016 279,378,000

Vessel Type By Number

Harbour 25%
Barges 18%
Fishing 12%
Ferries 15%
Offshore 12%
Dry 6%
Tankers 4%
Yachts 7%
Autonomous 1%

Results

Year 2020 2019 2018 2017 2016*
Calls/Premium 224,902 224,267 216,341 228,580 209,881
Reinsurance Cost 24,943 29,270 29,706 27,527 27,870
Net Claims (incurred) 156,491 151,038 136,165 149,087 136,060
Operating Expenses 53,741 52,156 48,709 49,164 42,704
Net Underwriting Result (10,273) (8,197) 1,761 2,802 3,247
Gross Outstanding Claims 464,442 440,348 425,420 433,441 474,576
Total Assets 905,789 843,216 859,393 823,121 846,880
Average Expense Ratio 23% 24% 22% 22% 21%
Solvency Margin 1.95 1.91 2.02 1.90 1.78
Reserves/GT Ratio $12.56 $11.15 $13.41 $11.56 $11.34

* 2016 covers the shortened period of 20th February 2015 to 31st December 2015

All figures $’000