for period ended 30 june - swedish club · (210) million at the end of june 2019. the club’s...
TRANSCRIPT
2019Half-Year Report
FOR PERIOD ENDED 30 JUNE
THE SWEDISH CLUB HALF-YEAR REPORT 2019
Combined ratio of108%
Focus on personalisedLoss Prevention
6.3%Return on Investments
Highlights
2
THE SWEDISH CLUB HALF-YEAR REPORT 2019 3
S&P rating A- withstable outlook
Free reservesUSD 221 million
ResultUSD 17 million
THE SWEDISH CLUB HALF-YEAR REPORT 20194
The free reserves have grown steadily, reflecting the outcome of The Swedish Club’s consistent operating performance.
0
50
100
150
200
250
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019H1
USD
mill
ion
151 142 151 168 186 183 195 213 204 221
Free reserves
THE SWEDISH CLUB HALF-YEAR REPORT 2019 5
The fundamental operations of the Club – the insurance business – have delivered well and predictably over time. The combined ratio has, in line withtarget, maintained an average level of below 100% for the last ten years.
Combined ratio
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019H10%
20%
40%
60%
80%
100%
120%
Reported period 4-year moving
87%
93%
92%
101%
100% 100%97%
94%
97%100%
99%
110% 110% 93% 86% 99% 98% 104% 99% 108%
THE SWEDISH CLUB HALF-YEAR REPORT 20196
Six months to 30 June 2019 (unaudited)
Amounts in USD millions H1 2019 H1 2018
Gross premiums earned 72.8 72.5Reinsurance premiums -18.6 -19.0Reinsurance commissions 0.9 2.2Premiums net of reinsurance 55.1 55.6Investment income transferred from NTA 2.1 2.7Claims net of reinsurance -47.6 -41.7Net operating expenses -11.8 -11.9Underwriting result -2.2 4.7Financial result 19.0 -4.5Result before appropriations, tax and discount 16.9 0.2Free reserves 220.7 209.6Combined ratio 108% 96%
Results
The Swedish Club reported a resultbefore appropriations, tax anddiscount of USD 16.9 (0.2) million,which represents an annual returnon free reserves of 16.6% (0.2).
The combined ratio of the Club was108% (96%) in the first half of 2019.Retained claims developed largely inline with expectations and the Clubincurred no significantly largeMarine or P&I claims. However, eventhough the Club did not notify anyclaim to the International Group’sP&I Pool, other clubs’ Pool claimspushed the combined ratio of theClub above 100%. The underwritingresult was USD -2.2 (4.7) million,end June 2019.
The financial markets weresupportive to the development ofthe Club’s investment assets.USD as well as EUR denominatedinterest-bearing debentures gainedvalue following falling interest rates.At the same time, equity holdingsbenefitted from favourabledevelopments of stock markets.The Club’s investment portfoliodelivered a return of 6.3% (-0.4%)and, hence, contributed well to thereported financial result of USD 19.0(-4.5) million.
THE SWEDISH CLUB HALF-YEAR REPORT 2019 7
The Club gainedbusiness volumes andfurthered its competitiveposition in the first sixmonths of the year.
THE SWEDISH CLUB HALF-YEAR REPORT 20198
As of 30 June 2019 (unaudited)
Amounts in USD millions H1 2019 H1 2018
Assets Investment assets 355.6 362.2Reinsurers share 59.7 41.6Receivables 136.7 81.7Other assets 60.1 59.9Total assets 612.2 545.4
Equity, provisions and liabilitiesFree reserves* 220.7 209.6Provision for unearned premiums 82.8 82.8Provision for claims outstanding 218.7 206.1Other liabilities 90.0 46.8Total equity, provisions and liabilities 612.2 545.4
* Equity, untaxed reserves and deferred tax
Balance sheet
The Club’s investment portfolio,composed of approximately 80%interest-bearing assets and 20%equity holdings, amounted to USD356 (362) million. The portfolio’sreduced size compared to the sametime last year is due to the timing ofservicing of previously reservedclaims which has more than off-setthe positive return of the portfolio.
The free reserves were USD 221(210) million at the end of June2019. The Club’s strong financialposition is maintained by thecontinuously favourable overalloperating performance delivered.
According to the Solvency IIregulations, the Basic Own Funds ofthe Club amounted to USD 238(232) million at mid-year. AddingAncillary Own Funds of USD 49 (52)million, the Eligible Own Funds
(EOF) of the Club came to USD 287(284) million. Having a SolvencyCapital Requirement (SCR) of USD98 (104) million, the key ratio ofEOF/SCR amounted to 294% (274),clearly signalling the financialstrength of the Club.
Further underscoring the financialstrength of the Club, in January ofthis year, S&P Global Ratings raisedits insurer financial strength andissuer credit ratings on The SwedishClub to A- with stable outlook. In thesame month, A.M. Best once againawarded the Club a FinancialStrength Rating of A- (Excellent) andthe Long-Term Issuer Credit Ratingof “a-”, with a stable outlook.
THE SWEDISH CLUB HALF-YEAR REPORT 2019 9
The balance sheet hasincreased year-on-yeardue to the favourabledevelopment of thebusiness.
THE SWEDISH CLUB HALF-YEAR REPORT 201910
The Swedish ClubBoard of Directors 2019
THE SWEDISH CLUB HALF-YEAR REPORT 2019 11
Back row from left: Lars Höglund, Anders Leissner (Secretary), Gustaf Grönberg, Jude Correa, Elisabeth Rydén, Lu Jian, Michael Vinnen, Peter Claesson, Rob GroolFront row from left:Zou Yingying, Ryan Chan, Karoline Rydelid, Anders Källsson, Lennart Simonsson, Lars Rhodin,Khalid Hashim, Twinchok Tanthuwanit, Demetri DragazisNot present:Thanasis C. Beis, Michael Bodouroglou, John Coustas, Gu Zhongdong, Andonis Lemos, Mikael Livijn, Weng Yi
THE SWEDISH CLUB HALF-YEAR REPORT 201912
THE SWEDISH CLUB HALF-YEAR REPORT 2019 13
Lars RhodinManaging Director
The Swedish Club’s offering isbased on financial stability, productrange, casualty response andproactive Loss Prevention. The Clubcontinues to grow according to planwith a half-year result of USD 17million. The combined ratio of 108%was affected by International GroupPool claims. However, on a ten yearaverage, the combined ratioremains below 100%. Free reservescontinue to be on a high level atUSD 221 million, enabling furtherbusiness growth.
The Club currently insures over3,000 vessels on H&M and hasdoubled its volume during the pastdecade in P&I to over 70 milliongross tonnes including charterers’liability.
The S&P ratings upgrade was arecognition of what we believe wealready had in place – qualitymembers and operating stability.
We were particularly pleased to notethat S&P remarked upon the Club’sstrong underwriting discipline,which reflects our ongoing strive forquality. We have also worked toreduce volatility in our capitalposition and have ensured that theClub is well-positioned for furtherdevelopment.
We also welcomed a new Boardmember, Mr. Ryan Chan, ManagingDirector, IMC Industrial Group,Singapore, who brings over 20 yearsof business experience to the Boardof Directors.
What the future holds in this volatilebusiness is not an easy prediction,but The Swedish Club will continueto work with members andbusiness partners to deliver the bestquality and efficient marineinsurance solutions for shipownersworldwide.
THE SWEDISH CLUB HALF-YEAR REPORT 201914
The Swedish Club continues todevelop new Loss Preventioninitiatives with the aim of proactivelyenhancing safety at sea.
Our latest development is TradeEnabling Loss Prevention (TELP). This powerful tool will have thecapacity to track every one of ourmembers’ vessels, match its positionwith our own statistics and records,and provide members and theirvessels with timely, tailored advicewhen they are approaching areas ofparticular risk. By providing thisservice, we can help members to trademore safely.
The Club’s Emergency ResponseTraining (ERT) can accurately bedescribed as a ‘win-win’ scenario.Members can use an ERT session as a way of meeting the InternationalSafety Management (ISM) Coderequirement to carry out one majorexercise per year. At the same time byplanning and enacting an ERT, we gainan insight into our members’operations and keep updated on therequirements and challenges ourmembers are facing.
Important Loss Preventionpublications recently launched are:
The Sulphur Guide – dealing with theSulphur Cap 2020 and beyond, writtenin conjunction with legal and technicalexperts providing information basedon real-life situations they haveencountered.
Claims at a Glance – offering aninsight into the Club’s latestpublications, highlighting some of thecases that we have handled andfeaturing up-to-date claims statisticsand the latest comments.
Dealing with Engine Room Fires –engine rooms on ships have all theingredients for a fire – oxygen, heatand flammable liquid under pressure.The guide provides an overview of thecauses and uses three real-lifescenarios to deliver advice on theimportance of following correctprocedures when dealing with anincident.
Together with our Maritime ResourceManagement (MRM) initiatives, TheSwedish Club will continue to activelywork to raise awareness, highlightbest practices and strive for a saferenvironment at sea.
Lars A. MalmDirector, Strategic Business Development & Client Relations
Loss Prevention
THE SWEDISH CLUB HALF-YEAR REPORT 2019 15
Head Office GothenburgVisiting address: Gullbergs Strandgata 6, 411 04 GothenburgPostal address: P.O. Box 171, SE-401 22 Gothenburg, SwedenTel: +46 31 638 400, Fax: +46 31 156 711E-mail: [email protected]: +46 31 151 328
Piraeus5th Floor, 87 Akti Miaouli, 185 38 Piraeus, GreeceTel: +30 211 120 8400, Fax: +30 210 452 5957E-mail: [email protected]: +30 6944 530 856
Hong KongSuite 6306, Central Plaza, 18 Harbour Road, Wanchai, Hong KongTel: +852 2598 6238, Fax: +852 2845 9203E-mail: [email protected]: +852 2598 6464
Tokyo2-14, 3 Chome, Oshima, Kawasaki-Ku Kawasaki, Kanagawa210-0834, JapanTel: +81 44 222 0082, Fax: +81 44 222 0145E-mail: [email protected]: +81 44 222 0082
OsloDyna Brygge 9, Tjuvholmen N-0252 Oslo, NorwayTel: +46 31 638 400E-mail: [email protected]: +46 31 151 328
LondonNew London House, 6 London Street,London, EC3R 7LP, United KingdomTel: +44 7470 004 601E-mail: [email protected]: +46 31 151 328
Contacts
www.swedishclub.com
www.halfyearreport.swedishclub.com
Printed by: PR-Offset, Sweden
Board of Directors photo: Jenny Christenson
1908pr700