At the half year stage, the Club reported a combined ratio of 95.8%, with an underwriting surplus of US$ 5.4m, compared with 98.5% and US$ 1.8m at the same stage of the prior year. Given the margin between premium income and claims costs the Board resolved that no General Increase would be applied for 2025.
2024 Financial Year
Claims from the Club’s Membership are at a slightly lower level than was the case in 2023 but claims to the International Group Pool are higher. Premium income has continued to increase and this has offset the increase in claims activity, allowing us to report a lower combined ratio. Growth has been largely organic, with existing Members expanding their entries in the Club.
From an investment perspective the year to date has been favourable, a positive investment result is therefore forecast.
2025 Financial Year
Building on growth in the Club’s Membership in 2024 we expect to continue to see steady growth in the number of Members, Vessels and Gross Tonnage during 2025.
Inflation will continue to impact overall claims costs and there will also be increases in reinsurance costs, particularly those to the International Group. Overall the Club will continue to target a break even combined ratio, providing ongoing stability and cover to Members at cost.
We will continue to focus on helping Members mitigate the risks that are faced, through Loss Prevention advice, which helps to offset the increasing cost of claims.
2025 Renewal
When the Board met on Wednesday 27 November 2024 it was noted that the Club Underwriting result remained within budget. Whilst claims to the 2023 and 2024 years had been running at higher levels, the Club had continued to see prior year claim improvement. Claims releases on back years, and favourable income development were drivers for the lower combined ratio reported in the Club’s Half Year Report. Whilst the Club’s own claims and claims to the International Group Pool had both increased since June this would not be sufficient to significantly impact the combined ratio and this is expected to remain under 100% at year end.
Given the margin between premium income and claims costs the Board resolved that no General Increase would be applied for 2025, consistent with the Club’s long-standing philosophy that increases in premium would only be requested when absolutely required. However, there remain some small areas of the Club’s business that will require further review, and communication will be made on the Club’s underwriting approach in due course. In the Yacht sector we have again seen ongoing increases in the overall cost of claims, partly driven by fires, a small number of claims in the US, but also by challenges for Members in securing the services of good quality crew.
The Board also resolved that no across the board increase in deductibles would be applied, deductible levels having been uplifted at the 2023 renewal, and that premiums offered for renewal would be inclusive of any adjustment to reinsurance costs. In a year when reinsurance costs are rising, the ability for the Club to absorb such costs without passing them onto our Members as additional premium is a strong reflection of our mutual approach.
As in previous years the Managers will also review individual Members’ claims records and operational risks, applying commensurate adjustments in premiums and terms where appropriate. This may include adjustments to deductible levels. The Club’s policy of applying selective ship inspections and management audits will also remain.
It is at this time that the Club would kindly like to remind all Members and their brokers that renewal terms cannot be concluded whilst any premiums remain outstanding.
Source: The Shipowners’ Club
