Press Release: Steamship Mutual Financial Update and 2022 Renewal
At the Steamship Mutual Board Meeting held in London on 26 October 2021, the Directors reviewed the Club’s financial position and decided on the policy for the forthcoming renewal on 20 February 2022.
During the Board Meeting the following developments were reported:
The Directors were pleased to note the continued growth in the Club’s owned entry by 6.7% in the period 20 February to 20 October 2021, increasing the combined owned and chartered entry to over 178M tons.
The Managers continue to work closely with the Members in connection with Covid-19 issues - notably those which have affected crew.
Six months through the current policy year the Club’s own incurred claims, excluding Covid-19 liabilities, are higher than at the same point last year. Whist the number of International Group (IG) Pool claims is lower compared to the previous year, severity is significantly greater.
The Board recognised the need to improve the Club’s underwriting result in order to achieve breakeven. The Directors also took account of the burden on the Club from its own claims and those from the IG Pool. Considering these and other factors, the Board decided that there should be a general increase of 12.5% in premium ratings for all classes of business.
The overall development of the Club’s own prior year claims is less favourable than expected, whilst claims in the IG Pool have developed in line with expectations.
In the eight months ending October the Club has recorded a return of 1.6%, excluding currency movements, amounting to US$19 million.
The Board noted the Club’s continuing financial strength and robust capital position. However, they concluded that it would not be appropriate to order a capital distribution at this time, given the volatility that is currently affecting the claims outlook.
Standard & Poor’s (S&P) have again reaffirmed the Club’s A rating, but on this occasion with a negative outlook, which they attribute to exceptional and adverse IG Pool claims. The Club’s capital is projected to remain comfortably above the S&P’s AAA requirement.
Stephen Martin, Executive Chairman of the Club’s managers, said:
“The dominant feature of the projected outcome for this year is a very marked increase in the cost of pool claims, which are shared by all the International Group clubs and thus a common experience for each of them. Provision for the Club’s own claims and for the effect of Covid has also pushed up the projections for claims in the current year. Pool claims for 2021/22 are at record levels compared to the same point of development in previous years.
In these circumstances, the Club’s Board concluded that it was necessary to address underwriting performance by ordering a general increase of 12.5% and greater risk retention through increased deductibles. This is an appropriate step towards restoring underwriting balance.
Naturally the Directors prefer not to ask for premium increases, but we believe that these steps will protect the Club’s financial strength now and in the future”.
Notes to Editors:
Comments are available on request from Steamship Mutual’s Global Head of Underwriting, Gary Field.
For further details relating to the Club’s key statistics, financial highlights and updates concerning underwriting, reinsurance, claims, safety and loss prevention, please see Steamship Mutual’s 2021 Management Highlights, which can be accessed here: https://www.steamshipmutual.com/club-finances/management-highlights.html