Steamship rings up $15m

Last year has turned out to be a lot better for the Steamship Mutual Underwriting Association than the modest surplus anticipated just a few months ago.

The protection and indemnity club’s free reserve has increased by $15m to $301.2m with most pointers turned in a positive direction after a loss of more than $17m over the previous couple of years.

The increase in free reserve is normally equivalent to the surplus although accountancy conventions sometimes produce a difference.

The club had previously projected a small increase in the free reserve while the Standard & Poor’s rating agency had forecast a bottom line surplus of $2m.

The combined ratio of Steamship Mutual was 96.7% indicating an underwriting profit.

The gain on the club’s investment portfolio of $8.4m was however modest and equates to a return of 0.9%.

The club is telling members that a reduced return on bonds, which account for the majority of the portfolio, dragged down higher returns on equity and hedge fund investments.

Steamship Mutual experienced a reduction in the number and value of attritional claims but in common with rivals is seeing an increase in larger casualties.

Overall these is a 7.5% reduction in claims to $229m compared to the previous year including those incurred but not reported (IBNR) and after adjustment for reinsurance recoveries.

Steamship Mutual however had two claims large enough to be pooled with the other P&I clubs.

The 11,400-gt Philippine ro-ro ferry St Thomas of Aquinas (built 1973) sank following a collision with a cargoship resulting in a disaster that left 120 dead or missing.

The 1,032-teu containership Heung-A Dragon (built 1973) grounded and caught fire following a collision with a handysized bulk carrier.

Owners tonnage in the club rose by 3.3m gt during the year to lift the total entered tonnage to 113.7m gt.

Premium for the current year is projected to be 8.2% higher following a 10% general increase and a rise in deductibles.