Steamship Mutual Financial Update and 2019 Renewal

October 2018

button logo large blue

At Steamship Mutual’s Board Meeting on 23 October 2018, the Directors reviewed the Club’s financial position and decided on the policy for the forthcoming February 2019 renewal.

The Board decided that, for the fifth successive year, no standard increase will be applied on any class of business for the 2019/20 policy year. As usual the Managers have been instructed to correct individual Member premium ratings where necessary.

It was also agreed to distribute US$23 million from Club funds to Members whose entries are renewed at 20th February 2019. This return will be credited equivalent to 10% of premium paid for 2018 Class 1 P&I mutual entries.

The Directors were pleased to note the continued growth in the Association’s owned entry, 1.8 million tons in the period 20 February to 20 September 2018, increasing the combined owned and chartered entry to over 160 million tons.

The Club reported that the overall cost of claims for the current policy year is lower than at the same point last year and compares favourably with the average experience of the last six years.

As far as claims on the International Group Pool are concerned, the Club noted that Pool claims are higher in value than at the same point in the 2017/18 policy year, albeit with fewer claims. Eight claims have been reported of which one is provisional. However it was noted that pool claims estimates are still immature and their development remains uncertain.

Investment returns in the first seven months of the policy year was reported at 0.8% excluding currency movements.

The Managers Executive Chairman Gary Rynsard commented:

“The Board was pleased to be able to confirm, for the fifth successive year, that there will be no standard increase in rating. Once again, the Club’s financial strength has enabled the Directors to support Members by containing their cost of insurance, whilst maintaining the Club’s strong reserves.

The Board also authorised a distribution to Members from the Club’s funds. This will make it the third year in a row in which the Club has been able to benefit Members in this way, reflecting the Club’s positive financial position. Some US$ 23 million, amounting to 10% of the mutual P&I premium for the 2018/19 policy year, will be distributed to Members, for vessels whose entry is renewed for the 2019/20 policy year.

The Board also decided to reduce release calls, in light of the Club’s very strong reserves.

All of these decisions will assist the Club’s Members. The Board is committed to offering such support, not least when the industry as a whole remains under considerable financial pressure in certain sectors and faces real uncertainty in many. The Directors are also well aware that these factors, and the ever present potential for volatile underwriting results, make it necessary to maintain the Club’s financial strength. All their decisions are made in the light of this overriding objective, and it is gratifying to be able to report, again, that the Club has been able to take these steps whilst at the same time maintaining its excellent financial health.”

Notes to editors:

The Club’s 2018 Management Highlights reported:

  • Free reserves increased by US$5.7 million to US$516 million putting the Club’s capital well in excess of the AAA level of target capital as measured by Standard & Poor’s.
  • A three year average combined ratio of 84.7%.
  • Investment returns of 3.5% were recorded on the combined portfolio.
  • Retained claims and International Group Pool claims were higher in 2017/18 than in 2016/17 but comparable to levels in earlier years.

Steamship Mutual’s 2018 Management Highlights can be accessed here.