The Swedish Club reported to its board today that it has achieved a consistent 2015 underwriting performance with financial stability and cost-efficient quality services for its members. It delivered a balanced underwriting result, despite higher claims activity and increased volatility, and demonstrated a resilience that is underpinned by diversification in its product lines, based on prudent management, the Club announced.
The year began with a series of major casualties, including total losses which were far beyond what could be expected in terms of probability. However, the Club closed the year with a combined ratio of 99 percent.
The challenge was on the investment side, particularly given the turbulent period in the autumn which was led by sharp equity falls in Shanghai and Shenzhen. The Club’s investment portfolio ended with a negative return of 1.3 percent, with the result that the year ended with a modest overall deficit of $3 million.
The Club said it cannot rely on handsome returns from investments, and it intends to maintain focus on a balanced underwriting performance.
The Club achieved a 7 percent growth in P&I business by gross tonnage; volumes exceeded 44 million GT owners’ entries and 66 million GT charterers included. Pool claims were relatively modest for the International Group in 2015, and the Group has been successful in achieving sizeable reductions in reinsurance costs for the policy year 2016/17. The mutual risk-taking model is still proving to be the most efficient.
The Marine business sector saw stable-to-increasing volumes in 2015, and the Club has continued to take up opportunities as they arise, with a strategy of converting follow lines to lead position where this is possible.
During 2015, the Club made three major investments: firstly, opening an office in London with its own underwriting presence, with a 2016 goal of developing that presence. The Club also expanded in Norway
, moving to new offices in Oslo and increasing staff numbers and market participation. The Club also decided to continue offering its members a 50 percent subsidy on MRM (Maritime Resource Management) training for a period of two years.
The entry into force of Solvency II in January 2016 presented the Club’s compliance team with a huge body of work – but it has also presented an opportunity to reinforce the approach to risk, to demonstrate a disciplined and transparent approach and to maintain a close dialogue with relevant authorities.
Lars Rhodin, Managing Director of The Swedish Club, said, “The Swedish Club remains committed to its strong and successful strategy of holding fast to core values and staying ‘on a steady course’, providing cost-efficient solutions and added value.”