American Club sees P&I premium decline on 2024 renewals
American Club suffered a decline in mutual P&I and FD&D premiums for the coming year, offsetting that partially with a rise in business for charters liability, the club said of its 2024 renewals.
Gross tonnage for the club’s mutual P&I entries of 22.5 million was down by some 2.5 million versus inception one year earlier, with a relative premium income drop of 6.5% over the period. The mutual FD&D portfolio "followed a similar shift," while charterers’ liability business is set to rise by about 5%, management said.
Initial combined loss ratio for the 2023/2024 policy year is tracking at 103% at end-2023, "with an improving trajectory."
The club’s board had targeted a 7.5% increase in expiring premium which, together with the improving margins, led to a cash increase on renewing business at 4.2%, net of the change in reinsurance program cost. Changes in T&C were said to add another percentage point to that tally. Average premium dollar per gross ton from expiry of the 2023 policy year to inception of the 2024 policy year increased by 6.4%.
Dorothea Ioannou, CEO of American Club manager group SCB, said: “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.”
Tom Hamilton, chief underwriting officer for SCB, added: “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. ... The American Club commences the 2024 policy year in a solid position with premium income for P&I, FD&D and charterers’ liability classes.”
Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.
