Steamship Mutual releases financial update and 2018 renewal information

At their Board Meeting in London yesterday (15th May), the Directors of Steamship Mutual approved the Club’s Report and Accounts for the 2017/18 policy year.

Free reserves increased by $5.7 million to $516 million and the financial year combined ratio was 112.8% ­- or 102% excluding the return of premium credited in November 2017 – reflecting a higher level of retained and pool claims in the 2017/18 policy year.

For the 2017/18 policy year, when compared to the preceding policy year, the Club experienced an increase in the average cost for claims in the layers below $250,000 but the overall cost was comparable to earlier years.

The number of larger claims was similar, however the average cost was higher as a result of the Club incurring three pool claims. Other Clubs’ pool claims were substantially higher than the preceding year as well.

Overall net estimated claims, including IBNR provision and after reinsurance recoveries, were $229 million, 23.4% higher than the 2016/17 policy year at the same point in time.

The combined investment portfolio recorded an overall gain of $39.3 million including favourable currency movement and before fees, a return of 3.5%.

The Club Board will consider this October, as part of its annual overall review of projected capital requirements and capital resources, another return of premium to Members and the level of release calls.

The Directors agreed to close the 2015/16 Class 1 P&I and Class 2 FD&D years without further calls and decided to move the present release call levels forward by a year so that Class 1 P&I and Class 2 FD&D will be subject to release calls as follows: 2016/17: 0%; 2017/18: 2.5%; 2018/19: 12.5%.

The level of entered tonnage grew by 7.3 million GT during the year and the overall total owned and chartered entered tonnage rose to 158.6 million GT.

Club Chairman Armand Pohan commented: “The financial results of the Club show very satisfactory operating performance and tonnage growth. The financial strength of Steamship Mutual will allow for the Board to consider a further return of premium at the October meeting. As ever the Board does everything to protect the interests of all our Members, be it the setting of general increases or deciding on returns of premium. The Board also believe that Members are best served with a prudent approach not only in respect of diversification opportunities, but also in setting investment policy and reserving for claims.”