In the recently published reports on the Group P&I scene, brokers Gallagher and Tysers both issued commentaries on the individual Group Clubs. IMN has, for the purposes of brevity, to report the two brokers’ commentaries into a series of articles, one per club. In alphabetical order, we come to:
The Japan Ship Owners’ Mutual Protection & Indemnity Association Self-managed.
|Standard & Poor’s Rating||BBB+|
Tysers noted that the new chairman, Yukikazu Myochin, was likely very pleased to be able to report on a good year for the Club. Tysers said that the positives included S&P maintaining its BBB+ rating while improving its outlook from stable to positive.
A 95% combined ratio and a 1.49% investment return produced an overall surplus of $11m, pushing free reserves up in dollar terms from $226.5m to almost $238m.
In local currency terms the free reserves grew by close to 10% to ¥26,410m.
Over the past five years, free reserves per owned GT improved from $1.85 to $2.49. Tysers said that this was still low compared to the International Group average of $4.19, but was moving towards acceptable levels, “especially when bearing in mind the very mutual approach of the Club and the reduced supplementary calls in 2014, 2015 and 2016”.
Owned tonnage, including the Naiko coastal class grew from 93.6m to 95.5m gt. There was a 13% rise in chartered tonnage to 13.7m gt.
The Club said that it was not seeing any clear sign of any upward trend in retained claims, but its contribution to Pool claims rose in 2018 to $15m, compared with an average of $9.5m for the previous four years.
The Club suffered one claim in 2018 in excess of $10m.
Both the new Chairman and the Director General, Hiroshi Sugiura, have said that, following a review of all services, the Club was “going back to basics” – an Association created by shipowners for shipowners, so as to be the Members’ first-choice Club.
Tysers observed that “it does appear that the Club is feeling the pressure of so many other Clubs now having a local presence in Japan, and with major Japanese shipowners having multiple-Club entries it must keep improving and simply cannot afford to fail on service or otherwise”.
Gallagher said that Japan Club’s numbers had to be considered in light of the significant effect that the Japanese Yen : US Dollar exchange rate has had on them in the past few years.
Whilst at the end of 2017/18 (March 31st for the Club’s financial year) the dollar was at Yen 111.0 compared to a rate 12 months prior to this of Yen 106.0 to the dollar.
Gallagher said that the Yen/$ currency volatility had a tendency to distort the policy year data in particular where, in dollar terms, premium income and claims incurred can fluctuate significantly year on year although in Japanese Yen terms this apparent trend would disappear.
The 2016/ 17 policy year has now been closed, with only 30% of the 40% deferred call having been made, benefitting Members by some $13.8m.
In August 2019, the Club announced a revised call structure to be effective for policy year 2020 to 2021.
Tonnage by vessel type (Tysers)
Tonnage by vessel type (Gallagher)
|Net Claims (incurred)||123,140||121,533||122,604||125,416||155,635|
|Net Underwriting Result||3,154||14,164||23,949||16,079||716|
|Gross Outstanding Claims||435,842||398,057||367,501||371,395||347,216|
|Average Expense Ratio||6.52%||6.21%||5.46%||5.18%||5.25%|
All figures $’000