At the Steamship Mutual Board Meeting held in New York this week, the Directors reviewed the Club’s financial position and decided on the policy for the forthcoming renewal on 20 February 2023.
The Directors noted the continued growth in the Club’s owned entry by 3.5% in the period 20 February to 20 September 2022, increasing the combined owned and chartered entry to over 200m gross tons.
Six months into the current policy year the Club’s own incurred claims are lower than at the same point last year. There have been no International Group (IG) Pool claims reported, although the development of prior years has been greater than expected. There have been no material Covid-19 claims.
The Board recognised the need to maintain a breakeven underwriting result and to reflect the impact of inflation. They decided that there should be a general increase of 7.5% in premium ratings for all classes of business. In addition, all Class I P&I deductibles of US$50,000 or less will be increased by 10%.
As usual individual Member ratings will be corrected, the Club points out, and any adjustments in the cost of the IG reinsurance programme will be passed on.
In the period ending September 2022 the Club has recorded an investment loss of 4.4%, excluding currency movements, amounting to an unrealised loss of US$51 million. The Board noted the Club’s continuing financial strength and robust capital position but concluded that it would not be appropriate to order a capital distribution at this time.
Standard & Poor’s (S&P) reaffirmed the Club’s A rating, and negative outlook. The Club’s capital is projected to remain above the S&P’s AAA requirement.
Stephen Martin, Executive Chairman of the Club’s managers, said: “At this early stage in the development of the policy year the incidence of IG Pool claims appears to be unexpectedly low. These large claims are, however, difficult to predict, as evidenced by the deterioration of prior year claims in 2022.
“The Club aims for underwriting breakeven each year and makes prudent provision for projected claims. This year, inflation amongst other factors will have an adverse impact on claims. and the Board determined that there should be a 7.5% increase in premium across all classes of business.
“As always, the Managers appreciate the continued support of the Directors and the Members.”