In a recent update from Steamship Mutual, the marine insurance P&I Club, the organisation's financial health and key developments were unveiled following a Board Meeting in Houston on October 24, 2023. The report reflects a robust financial performance and forward-looking plans for the year 2024 renewal.
Claims Performance
The report begins with a focus on claims performance, highlighting several key points. Notably, Steamship Mutual's own claims for the 2023/24 policy year, at the six-month mark, have outperformed expectations, coming in below the budgeted amount. This is a promising indicator of the Club's financial resilience and the effectiveness of its risk management strategies.
Additionally, the report notes that four International Group (IG) Pool claims have been reported by other Clubs for the 2023/24 policy year, and these claims exceeded the Club's retention level in the period up to September 20. This situation highlights the importance of having strong reinsurance arrangements in place and the Club's ability to handle such scenarios.
While the IG Pool claims for the 2022/23 policy year remain low in comparison to recent years, the report also mentions that prior year claims are developing satisfactorily, with reserve releases. This development is a sign of prudent financial management and demonstrates Steamship Mutual's commitment to maintaining a strong financial position.
Financial Performance
The financial performance of Steamship Mutual in the first half of the 2023/24 financial year is notably strong. Favourable claims projections have resulted in a better-than-expected combined ratio at the six-month mark. Additionally, the Club achieved an impressive investment return of US$33 million in the first seven months of the year, underlining its financial acumen.
S&P Global rates Steamship Mutual at 'A' with a stable outlook, indicating the Club's stability and strength in the market.
Tonnage Growth and Renewal
Owned tonnage has seen a healthy increase of 3.6% in the year leading up to October 20, 2023, reaching an impressive 120.6 million GT. This growth reflects the trust and confidence Members and their brokers have in Steamship Mutual.
The upcoming 2024/25 renewal will see a 5% general increase applied to premiums across all classes of business. This decision is made in consideration of claims projections and other factors, demonstrating the Club's commitment to maintaining financial stability and its ability to meet future obligations.
Capital Distribution
Steamship Mutual's Board acknowledges the Club's continuing financial strength and capital position. In recognition of this, they have ordered a capital distribution to Members. This distribution will amount to 7.5% of the 2023/24 mutual P&I premium for renewing vessels, equating to approximately US$25 million. This distribution underscores the Club's commitment to rewarding its Members and enhancing their financial well-being.
Following the capital distribution, the Club's capital is projected to remain comfortably above the S&P's AAA requirement, reaffirming its financial stability.
Release Calls and Conclusion
The report concludes with the announcement of a reduction in release calls for mutual Class 1 P&I and Class 2 FD&D entries. This reduction indicates Steamship Mutual's proactive approach to supporting its Members by easing their financial burden.
