The Swedish Club is firmly on track to expand its insurance portfolios and continue to build financial strength. Lars Rhodin, Managing Director, told Members meeting in Göteborg June 17 that 2009 was a successful year, despite wider economic challenges, and many of the Club’s most important goals were achieved.
Addressing the Club’s 138th Annual General Meeting, Lars Rhodin said that 2010 was a special year in the Club’s history, a celebration of 100 years as a P&I provider. In addition, 2010 marks the passage of 30 years since The Swedish Club opened its offices in Greece. Lars Rhodin said the establishment of the Greek office “was a very important decision in our efforts to internationalise The Swedish Club. We have now enjoyed three decades of very good relationships in the Greek market.”
The Swedish Club achieved an operating surplus of USD 14.8 million in 2009, as against USD 7.2 million in 2008. Free reserves rose from USD 106.8 million to the record level of USD 121.7 million.
Riding out “The Perfect Storm”
Lars Rhodin told the AGM: “Shipping has passed through a very difficult time and this experience could be described as ‘The Perfect Storm’. Shipping, of course, is a cyclical business. Nevertheless, the force with which the freight markets collapsed took everyone by surprise. At the same time, the sun came out again in 2009. The Club achieved an underwriting surplus and the investment performance recovered.”
Key achievements in 2009
Major claims were absent in 2009. The Club’s significant achievements during the year included a doubling of its operating surplus, a net combined ratio of 94%, healthy P&I growth and the achievement of positive results across all insurance classes. Half of the profit of USD 14.8 million was generated by insurance activities and the balance from investment returns. Despite a disappointing early start to the year, the Club’s investment portfolio went on to benefit from recovery in the financial markets, generating a healthy return.
Lars Rhodin continued: “The Club’s marine business (P&I and Hull) have now showed surpluses for more than two years. Looking ahead, we took important steps in 2009 to enhance the Club’s risk management capabilities (a new Internal Capital Model) and to restructure our reinsurance arrangements. The latter initiative, based on a multi-line approach, was the most important change in this area for 25 years.”
The Swedish Club’s insurance portfolios
As at June 1, 2010, the Club provides P&I cover for 1,299 vessels totalling 43 million GT (approx. 27 million GT representing owners’ P&I). Freight, Demurrage and Defence insurance is provided for 700 vessels. Last year saw an increase in claims frequency, largely accounted for by a higher level of crew claims.
In the Hull & Machinery sector, The Swedish Club’s book consists of 1,345 vessels, totalling 53.5 million GT (total value: USD 11.3 billion). Claims frequency declined in 2009, reflecting the influence of slow steaming and lay-ups. There were fewer large Hull claims, due to lower levels of shipping activity. The Club’s Model produced a highly accurate prediction of Hull claims frequency, although there were fewer large claims than forecasted and expected.
In the P&I sector, the largest single claim fell just below The Swedish Club’s retention.
Accidents: focusing on human factors
During his address, Lars Rhodin pointed to the significance of the decision, taken during 2009, to establishing The Swedish Club Academy, to take forward the continued development of a worldwide network of 60 licensed providers of the Club’s Maritime Resource Management (MRM) training. Lars Rhodin said: “It is vital that the root causes of accidents are addressed. MRM training puts the focus where it belongs – on the human factors.”
During the AGM Lars Rhodin welcomed the addition of three new members to the Board: Michael Vinnen, Managing Partner of F. A. Vinnen of Bremen; Fred Cheng, Chairman of Shinyo Group Ltd, Tokyo and Sun Jia-kang, Managing Director of Cosco Container Lines, Shanghai.
Summing up his report, Lars Rhodin told the meeting: “We know shipping is an easy target for regulators, that environmental sensitivities can only increase and that traditional maritime defences will continue to be eroded. Put simply, there is now zero tolerance of mistakes. Against this challenging background, The Swedish Club’s aim, as always, is to provide the best available insurance service to our Members.”
Yours sincerely,
The Swedish Club
Lars Rhodin
Contact:
Henric Gard, The Swedish Club, Telephone: +46 31 638 400
TRS Public Relations, Telephone: +44 1304 813 366
The Swedish Club was founded in 1872 and is today a leading mutual marine insurance company, owned and controlled by its members. The Club writes Protection & Indemnity, Freight Demurrage & Defence, Hull & Machinery,
Hull Interests, Loss of Hire, War Risks, and any additional insurances required by shipowners or charterers. The head office is located in Gothenburg, Sweden, and branch offices are located in Piraeus, Hong Kong and Tokyo. More information about the Club is available at: www.swedishclub.com