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 Reporter February 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

British Queen to Name New Ship

Queen Elizabeth II will christen P&O Cruises’ new flagship Britannia in Southampton, England, on March 10. She will be accompanied by her husband, Prince Philip, the Duke of Edinburgh.

Zamakona Yards' Commitment to Well-being

Recently employees of Zamakona Yards participated in a training course for maintaining Health, Safety and Environment (HSE). The theoretical practice focused on working at heights,

GasLog Post 4Q 2014 Results

GasLog Ltd. and its subsidiaries an international owner, operator and manager of liquefied natural gas carriers, today reported its unaudited financial results for the quarter ended December 31,

Finance

Indian Ports to Set Sail on Corporatization

Indian Finance Minister Arun Jaitley said in Union Budget 2015 that government-run ports in India will be encouraged to corporatize and become companies under the Companies Act.

Zvezda Shipyard Comes Up Despite Western Sanctions

German and Finnish partners continue to build Russia’s Far Eastern “Zvezda” shipyard for Arctic oil exploration ships, in spite of Western sanctions, reports Sputnik.

ADB Okays $30mln for Pak LNG Terminal

The Asian Development Bank (ADB) has approved a $30 million project loan to Engro Elengy Terminal Private Limited, a special purpose company which will build Pakistan’s

News

Spanish Boat Wins Leg of Ocean Race

Spanish boat Mapfre has claimed victory in the Auckland leg of the of the round-the-world Volvo Ocean Race from Sanya, China, to Auckland.   The Alicante-based

China's Maritime Advances Worry US

The Director of U.S. National Intelligence, James Clapper, has expressed his concern at the progress of China in maritime zones it shares with its neighbors, accused

British Queen to Name New Ship

Queen Elizabeth II will christen P&O Cruises’ new flagship Britannia in Southampton, England, on March 10. She will be accompanied by her husband, Prince Philip, the Duke of Edinburgh.

 
 
Maritime Careers / Shipboard Positions Maritime Standards Naval Architecture Offshore Oil Salvage Ship Electronics Ship Repair Ship Simulators Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | terms and conditions | 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: 0.2134 sec (5 req/sec)