The American Club (the Club), a US-domiciled mutual protection and indemnity club, has reported slight decreases in its year-on-year renewal results, indicating overall stability despite recent challenges.
For the Club’s Class I entries, it’s reported that gross tonnage has decreased by approximately $2.5 million compared to last year, now standing at $22.5 million, with a 6.5% drop in premium income.
Similar changes are seen in its Class II portfolio, while its Class III business is expected to grow by about 5% in 2024 compared to the previous year.
By the end of 2023, the initial combined loss ratio for the 2023/24 policy year was 103%; however, it is reported to be improving.
Eagle Ocean Marine, which serves operators of smaller vessels, continues to benefit its members. Its historical net loss ratio stands at 85%, with recent years showing improvement, although the current year is relatively stable but still in a phase of development.
The Club’s Board aimed for a 7.5% increase in expiring premiums for the 2024 policy year. With improving combined loss ratios, the cash rise year-on-year achieved was 4.2%, after adjusting for reinsurance program costs. Additional premium term changes contributed another 1% value, resulting in a total increase of 5.2% in renewing premium. On average, premium per gross ton increased by 6.4% from the 2023 to 2024 policy year.
Tom Hamilton, Chief Underwriting Officer of SCB, Inc., the Managers of the American Club, comments, “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. We are grateful for the support of members and brokers around the world.”
“The American Club commences the 2024 policy year in a solid position with premium income for P&I, FD&D and charterers’ liability classes, along with the contribution from Eagle Ocean Marine, in excess of $130 million and we are encouraged by the expectation for growth across all classes over the course of 2024/2025,” Hamilton adds.
Dorothea Ioannou, the Chief Executive Officer of SCB, Inc., further comments on the recent results. She states, “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.”
