American Club unveils premium boost after renewal
Outcome met targets set by the board, marine mutual confirms
Net loss ratio at fixed premium facility looking ‘relatively benign’
THE American Club secured a 7% increase in premium volume from the 7% general increase imposed at last month’s renewal, despite entered mutual tonnage remaining virtually unchanged year on year.
Increased deductibles and other measures had the impact of increasing the effective value of premiums by a further 4%, it added in a press release.
Premium income across mutual and commercial classes came in at $130m.
No figure was given for entered mutual tonnage as of the February 20 deadline, but the corresponding figure for last year was 26.9m gt.
That represents a market share of just under 2%, the smallest in the International Group.
The retention was around 94%, suggesting there were departures roughly corresponding to new business wins.
The mutual freight, demurrage and defence portfolio was renewed “on a similar basis” to mutual P&I, while charterers’ liability is set to increase by about 5% in 2025.
There are also signs of improvement in the net loss ratio at Eagle Ocean Marine, TAC’s fixed premium facility, which serves smaller vessels operating in regional trades.
Net loss ratio measures the percentage of premiums earned that an insurance company pays out in claims and loss adjustment expenses, divided by total earned premiums.
The yardstick shows how much premium income is needed to cover claims, a useful shorthand marker of an insurer’s underwriting performance.
Eagle Ocean loss ratio for 2023/24 is running below 40%, compared to an historical average of 68%.
The 2023/24 facility year is running at below 40%, while the current 2024/25 facility year is said to be looking “relatively benign”. However, it is still in an active period of development, as the facility year runs to July of each year.
“The club’s board mandated target increase in expiring premium for the 2025/2026 policy year was met as the cash rise year on year on renewing business was 7%,” TAC said.
“Supporting the premium position were deductible and term changes calculated to have a value of another 4% against net premium, resulting in an overall increase of 11% on renewing premium.”
The expectation is for growth across all classes in 2025/26 added TAC chief underwriting officer Tom Hamilton.
The American Club is rated BB+ stable by Standard & Poor’s.
