The Shipowners’ Club, the leading mutual P&I insurer in the smaller and specialist vessel sector, has reported resilient results for the year ending 31 December 2016.
The Club has reported a combined ratio of 98.6%, an increase in gross tonnage of 0.8m to 25.4m and an overall surplus of US$ 14.7m, including a return on the investment portfolio of US$ 11.8m.
Financial summary:
- Combined ratio 98.6% (2015: 98.2%)
- Capital and free reserves US$ 294.0m (2015: US$ 279.4m)
- Earned premiums US$ 201.1m
- Incurred claims US$ 149.1m
- Underwriting result US$ 2.8m
- Investment portfolio returned US$ 11.8m
- Entered vessels 32,749 (2015: 32,053)
- Gross tonnage 25.4m (2015: 24.6m)
Chairman Philip Orme announcing the results highlighted that “the Club has again delivered an underwriting surplus despite slightly reduced income. During the year we witnessed an increased number of vessels entering lay up as a result of a downturn in shipping activity especially in the offshore sector for which the Club is a significant provider of liability cover. We saw increased vessel numbers and overall tonnage grow slightly, mainly a consequence of owners taking delivery of larger offshore vessels such as heavy lift, accommodation and specialist pipe lay and construction vessels. We also noticed a general increase in the size of entered vessel within most vessel categories as even fishing vessels, tugs and small coastal vessels increased in size.
What remains of utmost importance to our membership as a whole is that we do not sacrifice our underwriting disciplines to chase higher premium. We anticipated this reduced premium and budgeted the Club’s expenditure accordingly, reflected in a combined ratio result of 98.6%. Our consistent approach was acknowledged during the year with an improvement in our rating by Standard and Poor’s from A- positive to A stable.
Members’ funds are invested in a number of asset types with the vast majority in Fixed Income securities and the balance in Equities. We measure performance by way of internationally recognised benchmarks and in each asset category we performed above the benchmark. This resulted in an encouraging investment return of US$ 11.8m.”
Simon Swallow, Chief Executive, commented “for those Members and their brokers who look for certainty that when they require the Club’s assistance it will be on hand, it remains essential to focus on the Club’s mutual model. We undertook an in-depth review of our services in the first half of 2016, with the help of more than 300 brokers from across the globe. The results illustrated that the brokers believe that our service is first class and that our mutual philosophy, experience and product quality, add the value and certainty of cover that is much needed by their clients, our Members, especially while they ride out the storm of challenging trading conditions.”
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The Shipowners’ Club is a mutual marine liability insurer, providing Protection and Indemnity insurance for small and specialist vessels since 1855. The Club is a member of the International Group of P&I Clubs and works with more than 600 brokers globally to insure over 32,000 vessels across a range of operating sectors and geographical areas.
