| P&I Insurance including Charterers’ Liability, 20 February 2024 | 2024 | 2023 | 2022 | 2021 | 2020 |
| No. of vessels | 2,248 | 2,437 | 2,375 | 2,230 | 2,247 |
| Gross tonnage (million) | 88 | 93 | 92 | 88 | 86 |
| FD&D Insurance, 20 February 2024 | |||||
| No. of vessels | 1,309 | 1,651 | 1,443 | 1,317 | 1,526 |
| Marine H&M Insurance including OSVs, 1 January 2024 | |||||
| No. of vessels | 6,116 | 5,237 | 4,780 | 3,999 | 3,354 |
| Insurance value ($m) | 217,100 | 188,100 | 154,500 | 106,542 | 98,691 |
| Of which the Club has insured ($m) | 23,500 | 22,600 | 19,500 | 13,800 | 11,819 |
The Club said that during the year it had has shown moderate premium growth through price adjustments and volume increases, which overall contributed to stabilized, close to break even, results and positive cash flows from insurance operations.
The performance of the investment portfolio was supported by improving stock markets and attractive interest rates. The Club maintained an unchanged profile of investment portfolio’s risk.
The Club’s financial position in terms of basic own funds and investment assets strengthened notably during the year.
The solvency requirement continued to be met with a good margin
For 2023, the result before appropriations and tax was a profit of $30.0m (2022: -$41.7m). Other comprehensive income, related to hedging of future operating expenses denominated in SEK into USD, was $3.7m (-$4.8m) before tax.
Claims incurred, net of reinsurance, amounted to $150m (2022: $138m). Changes in other technical provisions amounted to $3.3m ($0.8m). The total costs for net claims incurred was 82% (2022: 81%) of earned premiums, net of reinsurance.
During the year, there were 42 claims reported (of which, seven from the IG pool system) in excess of $0.5m. In 2022, there were 30 such claims (of which seven from the IG pool system).
The combined ratio for P&I was 98% (2022: 116%).
Earned premiums, net of reinsurance, amounted to $93m (2022: $82m).
The insurance year claims cost for other clubs’ pool claims was $13m (2022: $8m).
Claims incurred, net of reinsurance, decreased from $80m in 2022 to $73m in 2023. The loss ratio for the year was 79% (2022: 97%).
As of December 31st 2023 the P&I portfolio, including Charterer’s liability, consisted of 2,286 vessels, down from 2,462 vessels 12 months earlier, with gross tonnage of 90m, down from 93m gt 12 months earlier.
The combined ratio for FD&D was 81% (2022: 92%. As of December 31st 2023 the FD&D portfolio consisted of 1,447 vessels, down from 1,575 vessels 12 months earlier.
Earned premiums, net of reinsurance, amounted to were$9.5m (2022: $9.1m).
Claims incurred, net of reinsurance, decreased from $7.2m in 2022 to $6.3m in 2023. The loss ratio for the year was 66% (2022: 78%).
The combined ratio for Marine & Energy was 110% (2022: 87%). Earned premiums, net of reinsurance, were $77m (2022: $78m). Claims incurred, net of reinsurance, increased from $50m in 2022 to $68m in 2023. The loss ratio for the year was 88% (2022: 65%).
At the end 2023 the Marine & Energy portfolio consisted of 6,087 (5,203) vessels, with gross tonnage of 337m (2022: 263m gt) and covered insured value of $24bn, unchanged from 2022.
The number of vessels insured for Loss of Hire was 940 (2022: 963) with a gross tonnage of 50m (2022: 49m gt).
Investments
The return on the investment portfolio was 9.2% (2022: minus 9.8%), corresponding to an investment result of $34m (2022: minus $39m). Benefits were gleaned from both interest-bearing instruments and equities.
At the end of 2023 the value of the Club’s investments had grown by $86m. The total invested amount of $436m comprised 85% interest-bearing securities and 15% equity holdings.
For 2023, the provision for claims outstanding was $400m, up from $395m 12 months earlier.
At year-end, Hydra receivables had an estimated value corresponding to $20m, up from $16m 12 months earlier.
Post balance sheet date developments
The Club said that since the balance sheet date insurance activities had developed in line with established goals and expectations. The Club’s investment portfolio has started 2024 delivering positive returns.
Prospects for 2024
The Swedish Club said that the global economic outlook for the year altogether was difficult to assess. The consequences of the wars in Ukraine and Gaza, and the broader implications thereof, constituted uncertainty to world trade and economic development. The Club’s insurance operations were not expected to be significantly affected by short-term economic fluctuations, but the impact on the asset management could be significant. As one result of the uncertainty, the Club – going into 2024 – maintains its investment portfolio’s risk exposure at the lower level that it introduced during 2022.
Five-year summary
| $USm | 2023 | 2022 | 2021 | 2020 | 2019 |
| Earned premiums, gross | 235.7 | 225.9 | 193.1 | 173.8 | 157.4 |
| Earned premiums, for own account | 179.2 | 169.3 | 150.1 | 134.7 | 118.2 |
| Investment income allocated | 12.7 | – | – | 2.8 | 4.5 |
| Claims, for own account | -147.0 | -136.9 | -163.4 | -138.5 | -101.3 |
| Net operating expenses | -36.6 | -35.1 | -31.0 | -27.1 | -24.4 |
| Balance on technical account | 8.3 | -2.8 | -44.2 | -28.2 | -3.0 |
| Balance on non-technical account | 21.7 | -38.9 | 9.9 | 31.1 | 27.7 |
| Result before appropriations and tax | 30.0 | -41.7 | -34.3 | 3.0 | 24.6 |
Percentages
| Loss ratio | 82% | 81% | 109% | 103% | 86% |
| Expense ratio | 20% | 21% | 20% | 20% | 21% |
| Combined Ratio | 102% | 102% | 129% | 123% | 106.4% |
| Avge Expense Ratio (AER) | 12.7% | 13.6% | 12.6% | 12.8% | 13.2% |
Result for 2023 (2022)
| Pre-tax & appropriations | 30,035 | -41,677 |
| Change in safety reserve | -8,200 | 4,313 |
| Result before tax | 21,835 | -37,364 |
| Tax on result for the year | -6,049 | 7,918 |
| P/L FY | 15,786 | -29,446 |
| Total comp inc | 18,739 | -33,094 |
Thomas Nordberg, Managing Director, said that “the emphasis in 2023 has been on change management, focusing on our organisation and our people. Whatever goals we set ourselves, unless we have the right organisation and processes in place, we will never achieve them”.
“We finished with a 102% combined ratio and $34m investment gain, which combined to deliver an overall $30m profit – a performance with which we are quietly pleased,” said Nordberg, adding that “our recovery plan for regaining our A-rating with S&P is in progress. Thanks to the solid 2023 annual result, we are already on the way.”
He noted that in 2023 the Club had to deal with negative runoff on some older cases going back as far as 2017-2018. “However, overall 2023 has been much more positive, and we always focus on setting accurate reserves for claims,” he said.
More than 50% of the Club’s portfolio is now in Asia.
Of the new products introduced by the Club in 2023, the most important was Cyber Insurance cover, said Nordberg, noting that “this has been very well received by brokers and members, who are continuing to sign up to it. We are providing a product that clearly meets our clients’ requirements. This demonstrates that we are responding fast to market demands with a strong focus on our member’s needs – it is all about being agile and proactive. In addition, our new product for small craft has also been well received.”
Mikael Kromli, Director, Finance and Risk Management, said that The Swedish Club finished 2023 with underwriting in line with plan and investment returns exceeding expectations.
Kromli said that during 2023 the Club further improved its ability to optimise reinsurance cover by extensive analytical modelling. “Our actuary contributed greatly to enhance our model to enable improved statistical analysis. This has translated into more cost-efficient and effective covers for the Club and improved and less volatile bottom line results, which has greatly benefited our members.”
Johan Kahlmeter, Director, Claims, said that “It has been a yet another fairly benign year for claims across the industry, and we are pleased to say that The Swedish Club did not experience any pool claims in 2023,” In 2023 the average cost of H&M claims for the Club remained at a similar level to 2021 and 2022. Frequencies, however, had been on a downward trend for a number of years and this had also been seen in 2023. “This is very positive news,” he said.
“For P&I, preliminary figures are telling us that the increases in average claims cost seen in recent years have remained at a similar level throughout 2023, but we have seen slightly fewer large claims than in the preceding two years. The upward trend seen in frequencies for P&I in the past years has reversed and dropped in 2023. We hope this continues.”
