American Club Reports Progress in 2013

By Eric Haun
Thursday, June 19, 2014

The American Club reported progress during 2013 at the annual meeting of its members held in New York today. Despite difficult business conditions, including those intrinsic to an anemic maritime sector hampered by faltering growth in global trade, members heard that the club had advanced vigorously over the previous 12 months and had started the current year on a positive note.

The decline in tonnage and revenue which had featured during 2012 began to reverse itself in 2013.  Tonnage grew by about 10% year-on-year while annualized premium increased by 5%, a lingering effect of premium “churn”. However, entries were reported to have grown substantially since the beginning of 2014. Net additions to the P&I class had been about one million gross tons, with premium increasing commensurately.

The results for the financial year to December 31, 2013, disclosed an income surplus of just over $3m, compared with a loss of nearly $6m for the previous year. While overall revenue had grown by just over 1% year-on-year, expenditure had reduced by 13%. Encouragingly, incurred losses had declined by 22% to just over $65m, the lowest figure for more than a decade. This vindicated the club’s continuing policy of careful risk selection and loss control which had helped to fortify its finances and consolidate its platform for further development in the future.

The club’s GAAP free reserves, having grown by nearly 6% during the year to December 31, 2013, had increased by a further 9% during the first quarter of 2014. Free reserves at March 31, 2014, were thus 16% higher than they had been 12 months earlier.

Despite pressure on premium pricing, and rising International Group pool claims, the stabilisation of the club’s retained exposures, together with solid investment earnings, had increased its contingency fund. This stood at a record $87m at March 31, 2014.

As to investment earnings specifically, the club had generated 6.7% on its funds during 2013. This favorable trend had continued with a 3.8% year-to-date return by mid-June, 2014, despite continuing market volatility, and ahead of relevant benchmarks.

In light of these favorable developments, the 2011 policy year was being closed as originally budgeted, the surplus of $4.2m being transferred to the club’s contingency fund, lending it further strength for the years ahead.

In assessing the overall picture for 2013, the club’s chairman, Arnold Witte of Donjon Marine Co., Inc., said, “2013 was yet another challenging period for both the shipping industry in general and the P&I clubs in particular. But it was also a year of achievement for the American Club. Its economic fundamentals continued to improve during the year, as did its service capabilities and global reach. Despite an uncertain business climate, the American Club remains well placed to exploit opportunities in the future.”

Joe Hughes, chairman and ceo of the American Club’s managers, Shipowners Claims Bureau, Inc., echoed Mr. Witte’s remarks: “Notwithstanding difficult business conditions, 2013 was a very good year for the American Club. Claims exposures continued to develop favorably, premium levels remained firm despite a weak pricing environment, investments performed well, membership grew, free reserves increased, and the club’s service outreach gained further momentum.

“These trends have continued into 2014. The club continues to expand in all its major constituencies and its economic fundamentals remain solid. It is very encouraging to see a further increase in the club’s free reserves during the first quarter of 2014. It is also pleasing to report the closure of the 2011 policy year as budgeted and in substantial surplus – as was previously the case for 2010.”

Mr. Hughes concluded: “The progress made during 2013, and into the early stages of the current year, provides a firm foundation for further development toward the club’s centennial in 2017. The American Club will continue to rely upon the energy and enthusiasm which have driven its considerable progress over recent years, and which justify its optimism for the future.”

The annual meeting saw the election of Henry Djuhari of PT Meranti Shipping, Jakarta, and Craig Reinauer of Reinauer Transportation Companies, New York, as new members of the board. Steven T. Scalzo of Seattle was also elected as an independent director.

The retirement of Jonathan C. Wales of Reinauer was also noted. Wales was thanked most warmly for his outstanding contribution to the club’s affairs over many years, particularly as a long- standing member of the board’s finance and audit committee.
 

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter June 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Fundraiser Held for USS Gerald R. Ford Crew

Blackmer, a company in positive displacement and centrifugal pump and reciprocating compressor technologies, has a relationship with the U.S. Military that dates

Meercat Workboats Scores a Hat-trick

The U.K.’s Meercat Workboats says it scored a hat-trick; the Hampshire-based boat builder announced it is moving premises, that Seawork was a huge success and that

Northern Lights Opens Branch Office in Louisiana

Marine power generation and climate control products manufacturer Northern Lights has opened its fifth branch office, in Kenner, La, to enhance service to Gulf

Finance

Baltic Index Rises on Greater Vessel Demand

The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry bulk commodities, rose on Wednesday, boosted by demand that is driving rates up across vessel segments.

CMA CGM Crosses 91.05% Ownership Threshold of NOL

CMA CGM S.A has crossed the compulsory acquisition ownership threshold in Neptune Orient Lines Limited (NOL).    Following its all-cash voluntary conditional

Baltic Index Rises for Fifth Consecutive Session

The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry bulk commodities, rose on Tuesday for a fifth straight session on stronger demand across all vessel segments.

News

Sea Installer Receives Crane Upgrade

A2SEA-owned jack-up leaves Damen Shiprepair Amsterdam able to handle bigger offshore wind installation projects   Damen Shiprepair Amsterdam (DSAm) has concluded

Waterway Reopened after Barge Grounding

The U.S. Coast Guard has opened the Red River from mile marker 40 to mile marker 42 for vessel traffic, Monday.   The Red River had been closed due to a barge that had run aground at mile marker 41,

Baltic Index Rises on Greater Vessel Demand

The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry bulk commodities, rose on Wednesday, boosted by demand that is driving rates up across vessel segments.

 
 
Maritime Contracts Maritime Security Maritime Standards Naval Architecture Offshore Oil Pipelines Salvage Ship Electronics Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1357 sec (7 req/sec)