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Despite challenges, American Club experiences stability with the 2024 P&I renewal

  • 93% Member retention rate.
  • 2023/2024 policy year combined loss ratio tracking at 103%.
  • Average premium dollar per gross ton increased by 6.4%.
  • Eagle Ocean Marine bolsters profitability.

NEW YORK, March 15, 2024: The American Club has reported relatively moderate drops from the year-on-year renewal results, which reflects overall stability within the context of recent challenges as well as its de-risking strategy.

Gross tonnage for the Club’s Class I (mutual P&I) entries stands at 22.5 million, down by approximately 2.5 million compared to inception one year earlier, with a relative premium income drop of 6.5% over the period. Its Class II (mutual FD&D) portfolio followed a similar shift, while its Class III (charterers’ liability) business is poised to increase by about 5% in 2024 by comparison with the previous twelve months. Initial combined loss ratio for the 2023/2024 policy year is tracking at 103% as of December 31, 2023 with an improving trajectory.

Eagle Ocean Marine, the Club’s fixed premium facility, which serves the operators of smaller vessels in local and regional trades, continues to benefit the mutual membership, with its overall historical net loss ratio now standing at 85% with the 22/23 and 23/24 facility year running below 70%, while the current 23/24 facility year relatively benign but still in an active period of development.

The Club’s Board had mandated an overall target increase in expiring premium of 7.5% for the 2024 policy year. As the overall combined loss ratio of renewing tonnage has continued to improve, the cash rise year on year on renewing business achieved was 4.2%, net of the downward adjustment in the IG reinsurance program cost for 2024 passed on to the Members in the usual manner. Augmenting the premium position were terms changes calculated to have a value of another 1% against net premium resulting in an overall increase of 5.2% on renewing premium. In terms of the average premium dollar per gross ton from expiry of the 2023 policy year to inception of the 2024 policy year, this increased by 6.4%.

Speaking in New York earlier today, Tom Hamilton, the Chief Underwriting Officer of SCB, Inc., the Managers of the American Club, said: “The 2024 renewal campaign for the American Club built on the successes of recent renewals, focusing on rate adequacy and continued refinement of its portfolio and evidenced the support of its core, loyal membership. This is highlighted by a high retention rate amidst challenging times. We are grateful for the support of members and brokers around the world. The American Club commences the 2024 policy year in a solid position with premium income for P&I, FD&D and charterers’ liability classes, along with the contribution from Eagle Ocean Marine, in excess of $130 million and we are encouraged by the expectation for growth across all classes over the course of 2024/2025.

Dorothea Ioannou, the Chief Executive Officer of SCB, Inc., also commented on the Club’s recent results: “While the growth of the two preceding renewals has slightly retreated, this was partly deliberate through de-risking strategies, and partly natural as a result of S&P’s downgrade. The Club’s premium and tonnage volume remains at historically high levels, reflecting 30% more in premium and 20% more in tonnage as compared to the 2021 policy year, with consistently improving combined loss ratio results. Furthermore, the high retention levels of renewing tonnage, in the face of extraordinary disruption, is a testament to the strength of relationships within the Membership and acknowledgment of the American Club’s service. The Club represents a significant and important voice in the industry, and in the International Group. We have and will continue to ensure that it is heard.”

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.

For more information, please visit the Club’s website

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.