The Swedish Club reported a solid operating result to its board today, continuing a record of building on steady growth. 2014 was seen as a stable year, where the underwriting result outperformed the financial performance and the insurance products across the board returned a staunch to high surplus.
Renewals were in line with that market environment showing a modest increase in both tonnage and new members. Importantly, the Club was able to demonstrate almost 100% member retention – affirming the high levels of customer satisfaction it has reported throughout the year.
This operating result was strong given the claims experience and on-going market conditions, with the Club recording an overall surplus of USD 18.4 million while free reserves reached USD 186 million. The Club’s investment portfolio generated a return of 1.6% against a benchmark at the same level. The consolidated net combined ratio of 86% was more than satisfactory and benefits were seen from the diversity of product mix generating good balance and some welcome synergies.
During 2014, the Club’s turnover continued to grow, its P&I fleet reaching the 60 million GT level, of which 40 million GT were owned entries. The P&I side also saw a frequency rise in claims, driven largely by an increase in crew injury and illness.
The Marine business sector saw stable to increasing volumes over the period, with a frequency at 0.2 claims per vessel/year with lower severity reported overall, due to competitive ship repair prices and good repair terms.
Loss prevention is seen as key to the long term success of the Club and the value it provides to its members. Throughout the year it has provided quality loss prevention advice and a range of informative publications, along with its continuing support for the Maritime Resource Management (MRM) scheme, which contributes to the global drive to reduce large navigational claims arising from shortcomings in human behaviour.
The year ended on a good note with A.M. Best Ratings Services Ltd awarding the Club a financial strength rating of A- (Excellent) and an issuer credit rating of “a-”, with a stable outlook, claiming the Club is expected to maintain an excellent risk-adjusted capitalisation throughout 2015.
Lars Rhodin, Managing Director of The Swedish Club said: “We are a Club in constant movement, offering our members comprehensive solutions. Our aim is for healthy growth against a backdrop of stable pricing and positive financial performance. We believe that in this competitive marketplace you cannot jeopardise quality, and our solid performance this year has shown that approach to be the correct.”
The Swedish Club was founded in 1872 and is today a leading and diversified mutual marine insurance company, owned and controlled by its members. The Club writes Protection & Indemnity, Freight, Demurrage& Defence, Hull & Machinery, Hull Interests, Loss of Hire, War Risks, and any additional insurances required by shipowners or charterers. It also writes Hull & Machinery, War risks and Loss of Hire for Mobile Offshore Units and FPSOs. Its head office is located in Gothenburg, Sweden, with branch offices in Piraeus, Hong Kong, Tokyo and Oslo.