Steamship Mutual addresses underwriting imbalance

Press Release

London, 14 May 2013

Gary Rynsard, CEO
Gary Rynsard, CEO

Steamship Mutual has released interim financial results for the year ending 20 February 2013.

As with all International Group Clubs, underwriting performance for the year ended 20 February 2013 was adversely affected by the worst Pool experience on record. Claims within the Club retention were also at higher levels than predicted, reflecting continued upward pressure upon claims despite the economic downturn. Nevertheless there was an improvement in prior year results, which is consistent with the Club’s normal experience. These factors resulted in a financial year combined ratio of 112.5% and an increase in the three year average ratio to 106.4%.

The Club benefited from an investment gain of US$27.0 million, a 3.0% return, and the total of cash and investments increased by 5.2% to US$944.7 million.

These investment gains largely offset an adverse underwriting result, and free reserves stand at US$286.2 million for 2013, a reduction of US$9.6 million from the position at 20 February 2012.

Colin Williams, Head of Claims, said:

“During 2012 the Club experienced fewer claims in the layers below US$250,000, and up to the Club retention as compared to the preceding year. However the average cost of claims was higher, in particular for claims above US$1.8 million, and the Club had two claims on the Pool as opposed to one. Net estimated claims for the 2012/13 policy year, including IBNR provision and after reinsurance recoveries, are US$247.8 million, 6.7% above the comparable figure for the 2011/12 policy year at the same point.”

Stephen Martin, COO, said:

“At renewal, the overall achieved increase – including individual adjustments for record and the value of significantly higher deductibles in some cases – was above the 7.5% increase set by the Club Board. This will enhance the Club’s ability to accommodate the possibility of another adverse year for claims.”

Gary Rynsard, CEO, said:

“The Club’s Directors and Managers appreciate that this is an extremely difficult time for shipowners, and it remains their aim to deliver the best possible service to Members at the minimum sustainable cost.”

 

…Ends…


Note to Editors: Additional photography and comments are available upon request


Press contact:

Jacqueline Callard
Steamship Insurance Management Services Limited
Tel: ( +44 (0) 20 7650 6515 (direct)
Emai: jackie.callard@simsl.com

 

About Steamship Mutual

Steamship Mutual (managed by Steamship Insurance Management Services Limited) is a leading provider of Protection & Indemnity (P&I) insurance. As one of the largest P&I Clubs in the International Group, Steamship Mutual insures a diverse range of shipping around the globe, for both shipowners and charterers. With offices in London, Bermuda, Greece, Hong Kong, Brazil and correspondents in every major shipping port worldwide, Steamship Mutual employs highly professional and experienced staff including qualified lawyers, ex-senior mariners, and specialist insurance and claims experts.

For further information visit: www.steamshipmutual.com