Tysers and Gallagher individual club summaries: Swedish Club

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:

Sveriges Angfartygs Assurance Forening (The Swedish Club)

Managers     Self-Managed

Gross Tonnage

Owned 47,500,000
Chartered 31,000,000

Free reserves*

2019 203,838,000
2018 213,472,000
2017 194,880,000
2016 183,074,000
2015 186,342,000
Standard & Poor’s Rating A-

* All classes of business

Tysers said that the big news for the Club in 2018/19 was its upgrade by S&P to an A- rating. The Club achieved a combined ratio of 99% across all business lines, with P&I at 89%, allowing the Club to make a 5% return on the 2018 P&I premium. However, Marine and Energy recorded a CR of 122%.

Investments produced a negative return of $6m; with the P&I return premium this contributed to a fall in free reserves of nearly $10m to $204m.

Swedish Club’s accounts are calendar-year based. This meant that, like Shipowners’ Club. Its investment results for 2018/19 missed out on the equity recoveries in early 2019. Swedish Club’s half-year results to June 2019 showed a 6.3% return on investments for the period, pushing free reserves back up to more than $220m.

The Club saw a drop in owned tonnage of more than 3m gt to 48m gt, due mainly to the enforced loss of Iranian tonnage following the reintroduction of sanctions. Chartered tonnage continued to grow.

Managing Director Lars Rhodin described 2018 as ‘more evolution and small improvements everywhere rather than revolution’.

It was a benign year for P&I claims but Rhodin warned that four years of no general increases meant that the Club was not keeping up with inflation.

Rhodin said that “we do have concerns that P&I clubs are creating a perfect storm with zero general increases for a number of years – decisions driven more by strong capital than strong underwriting performance”.

Gallagher said that the Club advised a return of premiums to Members in respect of the 2018/19 policy year of 5%, which amounted to $4.4m (2017/18, 4% totalling $3.4m). However, it did not  follow the pattern on the previous two years and announce a planned return for the 2019 – 20 year shortly after its renewal.

Total assets for Solvency II rose slightly and the solvency capital requirement fell slightly by the half year, leaving the Club in a somewhat stronger position than seen at December 31st 2018.

Tonnage by vessel type (Tysers)

Container 39%
Bulkers 37%
Bulkers 21%
Other 3%

Tonnage by vessel type (Gallagher)

Bulker 37%
Container/General Cargo 21%
Other 3%
Passenger/Ferry 2%

Tonnage by area (Tysers)

Asia 54%
Europe 42%
Middle East 3%

Tonnage by area (Gallagher)

Asia/Pacific 54%
Europe 44%
ROW 2%
Year 2019 2018 2017 2016 2015
Calls/Premium 90,485 95,362 104,113 109,958 106,006
Reinsurance Cost 27,300 27,390 25,096 26,755 27,139
Net Claims (incurred) 47,052 60,562 60,726 60,482 59,689
Operating Expenses 14,870 15,303 14,854 14,523 15,209
Net Underwriting Result 1,264 (7,893) 3,436 8,198 3,969
Gross Outstanding Claims* 225,053 258,123 259,819 237,936 272,959
Total Assets* 530,472 533,582 516,710 510,744 537,017
Average Expense Ratio 13.80% 13.40% 13.3% 13.30% 13%
Solvency Margin* 2.36 2.07 1.99 2.15 1.97
Reserves/GT Ratio* $4.29 $4.18 $4.16 $4.19 $4.49

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

All figures $’000