American Hellenic Hull strengthens Balance Sheet and Key Financial Indicators
• Year-on-year annualized income for Club’s mutual P&I business increases by 8% at February 20.
• Year-on-year P&I tonnage increases by 5%.
• Funds under investment generate a 5.4% return for 2020, despite challenging market conditions
• Retained claims for 2020 tracking lower than 2019, but Pool exposures continue to climb.
• Eagle Ocean Marine grows revenue while maintaining solid profitability.
• American Hellenic Hull strengthens balance sheet and key indicators as pricing power persists.
NEW YORK, MARCH 16, 2021: At its meeting conducted virtually from New York last week, the Board of the American Club noted that, despite challenging business conditions, the Club enjoyed a solid performance over
the 2021 P&I renewal season. Both its mutual and fixed premium P&I portfolios performed well while American Hellenic Hull continued to consolidate its market position, gaining further momentum since the beginning of the year.
Year-on-year annualized premium for the Club’s mutual P&I class grew by a little under 8% at February 20, while revenue for its Freight, Demurrage and Defense (FD&D) business increased by over 10%. Taking into account growth in the Club’s charterers’ business, total income on renewal is projected to be about 8% higher for 2021 by comparison with the previous year.
Premium attributable to renewing P&I entries for 2021 saw an increase, in cash terms, of approximately 5%, a rise in conformity with that ordered by the Board last November. However, taking into account increases in deductibles, in some cases significant, and changes to other insurance conditions, the overall premium increase, as if expiring terms had applied, was closer to 7.5%.
Tonnage in the Club’s mutual P&I class increased by about 5% year-on-year, to approximately 18 million gt overall. However, its Freight, Demurrage and Defense (FD&D) entries moved substantially higher in tonnage terms, by nearly 14%, to 12.2 million gt. In addition, as mentioned above, there was an increase in daily tonnage on risk in regard to the Club’s charterers’ business.
As to the performance of its funds under investment, the Club enjoyed a 5.4% return over the year to December 31, 2020. Although not as high as the previous year’s earnings, this was nonetheless a creditable result in view of the market uncertainties which characterized the period.
Retained claims for 2020 are emerging more favorably than those for 2019. The latter year experienced several unusually large exposures below the pooling threshold, but has been able to take some benefit from reinsurance protection as a hedge against further deterioration. Pool claims for 2020 are developing in an above-trend direction in a manner similar to the experience of 2018 and 2019. Although the American Club, once again, had no claim on the Pool for its own account during the year, nor has had since 2016, its contributions to pooling continue to form a significant part of the Club’s overall claims exposure.
The American Club’s fixed premium brand, Eagle Ocean Marine (EOM), has continued to make progress into the beginning of 2021. Premium for the 2020/21 policy period to date has grown by about 10% over the figure for the previous year at the same point, and is forecast to exceed $16.5 million in total for the current facility year, a record.
Aimed at the operators of smaller vessels in local and regional trades, with a substantial footprint in Asia, EOM continues to be a steady contributor to the American Club’s mutual membership, enjoying a cumulative combined ratio of about 75% since inception. As the fixed premium P&I space continues to undergo transition and realignment, the attraction of EOM as a haven of stability, and the gold standard for service provision, will continue to energize its development.
American Hellenic Hull, the Club’s hull and war risks underwriting subsidiary, has continued to enhance its market position. Preliminary results for the financial year to December 31, 2020 disclose a small loss for the year, similar to that for 2019. However, against a background of robust premium pricing, the insurer’s balance sheet strengthened at year-end, net assets (equity) increasing by 29% by comparison with the previous year.
There were also improvements in several other key ratios at year-end 2020, including the insurer’s solvency capital requirement (SCR) at 130%.
American Hellenic Hull’s performance has gained yet further momentum into the early part of the current year, with vessels insured, underwriting income, operating profitability and balance sheet strength all maintaining an encouraging upward trajectory.
Commenting upon the confluence of these positive trends across the Club’s diversified portfolio of interests, Joe Hughes, Chairman and CEO of SCB, Inc., the Club’s managers, said: “Although uncertain business conditions prevail in both the shipping and insurance sectors, the American Club’s recent experience has been encouraging. The 2021 renewal of the Club’s mutual P&I and FD&D portfolios proceeded in a positive direction, while both EOM and American Hellenic Hull have performed with credit over recent months.
“Although we live in challenging times, my colleagues and I are certain that the difficulties of the present will generate opportunities for the future. These opportunities will be found across the increasingly broad marine insurance landscape which the American Club, by virtue of its diversified capabilities, is richly equipped to develop over the years to come.”
Notes to Editors
The American Club
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, USA.
The American Club has been successful in recent years in building on its US heritage to create a truly international insurer with a global reach second-to-none in the industry. Day to day management of the American Club is provided by Shipowners Claims Bureau, Inc. also headquartered in New York.
The Club is able to provide local service for its members across all time zones, communicating in eleven languages, and has subsidiary offices located in London, Piraeus, Hong Kong, Shanghai and Houston, plus a worldwide network of correspondents.
The Club is a member of the International Group of P&I Clubs, a collective of thirteen mutuals which together provide Protection and Indemnity insurance for some 90% of all world shipping.
The American Club also operates a fixed premium facility, Eagle Ocean Marine (EOM), aimed at the operators of smaller vessels in local and regional trades. Since it commenced underwriting in 2011, EOM has enjoyed considerable success in building a growing footprint in this specialist market and generating strong profitability for the Club.
American Hellenic Hull Insurance Company, Ltd. (AHHIC) is a wholly-owned, Solvency-II accredited hull and war risk subsidiary of the Club, based in Cyprus. Since it began operating in mid-2016, AHHIC has enjoyed an increasing market presence coupled with growing premium volume and rising profitability.
For more information, please visit the Club’s website http://www.american-club.com/
P&I Insurance
Protection and Indemnity insurance (commonly referred to as “P&I”) provides cover to shipowners and charterers against third-party liabilities encountered in their commercial operations; typical exposures include damage to cargo, pollution, death/injury or illness of passengers or crew or damage to docks and other installations.
Running in parallel with a ship’s hull and machinery cover, traditional P&I cover distinguishes itself from usual forms of marine insurance by being based on the not-for-profit principle of mutuality where Members of the Club are both the insurers and the assureds.