Steamship Mutual reports that underwriting performance continues to strengthen

Steamship Mutual, a leading global P&I Club today announces that during the 2009/10 financial year the Club’s underwriting performance has continued to strengthen and it has made good progress towards meeting its financial objectives. An operating surplus of US$63.9 million has increased free reserves by 34% to US$ 251.6 million. 

In February 2010 Standard and Poor’s placed a positive outlook on the Club’s BBB+ rating reflecting its increased capitalisation, expectations for continued underwriting discipline and implementation of the new investment strategy. 

Gary Rynsard, CEO, commented,

“The strengthening underwriting performance resulted in a surplus of US$ 21.1 million and a reduction in the three year average combined ratio to 93.2%, excluding the impact of the additional premium. In contrast to the investment losses experienced last year, Steamship Mutual’s combined investment portfolio recorded a gain of US$ 45.1 million. This capital injection, combined with the additional premium levied during the year, increased the total level of cash and investments held to US$721.0 million.”  

“2010 proved to be another positive renewal for the Club. Allowing for adjustment in terms, an overall increase in rates of 3.1% was achieved, together with a modest increase in tonnage. The consolidation of entries with the Club from several existing Member was most encouraging and the Directors and Managers would wish to express their appreciation to the Membership for their continuing trust and support."

Financial Highlights

• Investment strategy redesigned around a risk budget set relative to projected claims and capital requirements;
• Free reserves rise 34% to US$251.6;
• Three year average combined ratio falls to 93.2%, excluding additional premium;
• Combined gain on investments of US$ 45.1 million, a 7.5% return. 

2010 Renewal

• Overall combined increase in renewed premium in the region of 3.1%, against a 5% general increase set by the Directors;
• Owned and chartered tonnage increased from 75 million GT to 83 million GT;
• Over the year as a whole owned entered tonnage increases by 3.1 million GT. 

Trading Outlook

The outlook for the world economy and investment markets is uncertain. The Club has an investment strategy that seeks to preserve capital and to reduce investment volatility. Premiums are expected to remain near to current levels with renewal increases and new business being balanced by the effects of scrapping, lay up and churn. Claims are also projected to be at 2009 levels, though as ever they will be determined by the incidence of larger claims which are inherently unpredictable. The Club is in a sound financial position, ready to meet the challenges ahead. 

…ends… 

Note to Editors: Photography and additional comments are available upon request

Press contact:

Jackie Callard
+44 (0)20 7650 6515
Jackie.callard@simsl.com