American Club welcomes the progress of solid results
Eagle Ocean Marine (EOM), the club’s fixed premium facility, saw its revenue and reach increase significantly in 2020.
âThe compound annual growth rate of 17% in premiums over the previous three years has been accompanied by strong underwriting results, producing an overall combined ratio since inception of less than 80%,â said the American Club.
American Hellenic Hull, the Cyprus-based war risk and hull underwriting subsidiary, saw its prices and balance sheet strengthen last year. The club said they expect the profitability of the branch to increase in the coming months.
The exposure to American Club attritional claims in 2020 improved from 2019. However, the upward trend in losses suffered by the International Group pool in recent years continued in 2020. The American Club has said that 2020 “will probably become the most expensive pool year on record. . “
The club posted a 5.4% return on its investment portfolio for 2020. This contributed to a year-end GAAP surplus of just $ 3.75 million (approximately SG $ 5.04 million) less than that recorded on a restated basis for 2019. However, the year-over-year reduction in surplus was approximately $ 6.8 million on a non-restated basis.
The club’s combined ratio for 2020 was 112% (116% without the accounting charge). The club said the figure underscores the need for greater sustainability of premium pricing.
The American Club adopted a 5% general increase for the 2021 renewal. This resulted in revenue growth of approximately 7.5%, taking into account deductibles and other changes in insurance terms. The club also noted that the risk profile of membership renewal was favorable, implying a positive claims outlook for the future. Growth continued at the start of the year, with a 7% increase in registered tonnage for Class I (P&I) risks during the first three months of the insurance year.
At the club’s annual directors meeting, which took place immediately after the membership meeting, George D. Gourdomichalis of Phoenix Shipping and Trading SA and Robert D. Bondurant of Martin Resource Mgmt. Corp. were re-elected respectively chairman and vice-chairman of the board of directors. Dorothea Ioannou was re-elected as Secretary and Lawrence J. Bowles was re-elected as Advocate General.
â2020 has been a particularly difficult year,â said Gourdomichalis. âThe disruption caused by the COVID-19 pandemic has posed unprecedented challenges to both global trade in general and the conduct of insurance business in particular. Nonetheless, progress has been made in all areas of the club’s business despite unfavorable operating conditions.
âThe club remain well positioned to exploit the many opportunities they see in their future. In doing so, it will rely, as it always has, on the unwavering support of its members, to whom my fellow directors and I send our sincere thanks and gratitude.
â2020 has been a year that many people would rather forget,â said Joe Hughes, president and CEO of the Shipowners Claims Bureau, director of the American Club. âThe rapid onset of the COVID-19 pandemic has created a particularly difficult business environment for virtually everyone, everywhere. And nowhere has the impact of the pandemic been felt more keenly than at sea. Looking back on 2020, a special thought must surely go to the seafarers, whose work depends on the livelihood of the entire community. maritime. “
Hughes noted that underwriting results among P&I insurers remain under pressure, saying this has highlighted the need for more sustainable pricing going forward.
âNonetheless, despite the stress of the past 12 months, the American Club awaits with its characteristic optimism a future of continuous opportunity,â he said.