Monday, February 25, 2019

Protection and Indemnity Insurers Report a Positive Position on Claims,Investments and Freight Cover

P&I Club sees Rising Tonnages and Revenue
Shipping News Feature
US – WORLDWIDE – The American Club says it has experienced a very positive outcome to the recently-concluded 2019 P&I renewal season. The Club reports mutual P&I and FD&D (freight, demurrage and defence insurance) business saw increases in both tonnage and revenue, while the Club’s fixed premium facility, Eagle Ocean Marine (EOM), recorded a significant rise in year-on-year income. The Club also points out good news on the claims and investment fronts.

The American Club’s mutual P&I business saw tonnage increase by more than 1.6 million gross tonnes as of February 20, 2019 by comparison with the previous year, and by just under 900,000 gross tonnes in regard to mutual FD&D entries. Year-on-year premium growth was more subdued, as soft market conditions continued to prevail, with increases of 4% for P&I and 2% for FD&D entries. However, the average rate per gross tonne on renewing P&I entries was about 1.5% higher than the expiring figure, a positive sign for risk pricing into 2019 and beyond.

The Club’s retained claims development for the most recent policy year remained favourable, emergence for 2018 at the twelve-month point being some 26% better than 2017. While the figures are immature, they augur well for the future, although the incidence of larger claims within the International Group Pool over recent months will counterbalance to some extent the very favourable results of the Club’s own Members.

The Club’s fixed premium brand, Eagle Ocean Marine (EOM), also saw substantial growth. It acquired nearly 450,000 gross tonnes of new business over the renewal season, reflecting additional revenue of about $2.75 million. Year-on-year premium for EOM increased by 42% as of February 20, 2019, while its claims performance continued to develop favourably. EOM complements the Club’s mutuality as it grows its footprint throughout the world. In a period of some uncertainty for the fixed premium P&I market, EOM remains committed to providing the gold standard of service in its field.

Having successfully weathered financial market turmoil toward the end of 2018, the American Club has seen its investment portfolio perform well into the current year. While the Club’s investment return was flat at year-end 2018 (though substantially better than benchmark), its portfolio generated a return of 2.7% for January 2019 alone, with a positive 1% in the fixed income space being further buoyed by an equities performance in excess of 7% for the period. Speaking in New York, Joe Hughes, Chairman and CEO of SCB, Inc., Managers of the American Club, said:

“The 2019 renewal was thoroughly positive for the American Club and Eagle Ocean Marine. Both performed exceptionally well in a challenging environment. Their success in attracting new business speaks to the confidence of the global maritime community in the Club’s and EOM’s ability to deliver insurance services of the highest quality and relevance to their customers. Our outstanding people are at the core of our continuing success, and I am certain that the American Club and EOM will continue to be the leading choice for those we are proud to serve over the years ahead.”

The American Steamship Owners Mutual Protection and Indemnity Association, Inc. (the American Club) was established in New York in 1917. It is the only mutual Protection and Indemnity Club domiciled in the entire Americas and its headquarters are in New York with subsidiary offices located in London, Piraeus, Hong Kong, Shanghai and Houston, plus a worldwide network of correspondents. It is a member of the International Group of P&I Clubs which is responsible for the Protection and Indemnity (P&I) insurance for some 90% of all world shipping.