All material subject to strictly enforced copyright laws. © 2021 Insurance Insider is part of Euromoney Institutional Investor PLC.
Accessibility | Terms & Conditions | Privacy Policy | Modern Slavery Act | Cookies | Subscription Terms & Conditions

Gard falls to $27mn H1 loss on elevated pool and Covid-19 claims


P&I club Gard reported a post-tax loss of $27mn in the first half of the 2021 financial year on an estimated total call basis as the trend of large pool claims continued to hit the bottom line.

In addition, Covid-19-related crew claims and pandemic-driven cost increases in hull, loss of hire and P&I casualty impacted performance.

The P&I club was driven to an underwriting loss during the period, with a combined ratio of 113%.

The club reported equity of $1.2bn on an actual call basis.

CEO Rolf Thore Roppestad said buyers had benefited from reduced premium rates in recent years in a benign claims environment.

The club said it would seek premium increases in the region of 7.5% across its portfolio at the next renewal, meaning most members would experience high-single-digit rate increases.

In an interview with this publication, Roppestad said: “We have responsibility to have a P&I mutual product which is correctly priced long term.

“We see that with the increase in severity for large claims and the increase in crew claims following the coronavirus pandemic.

“There has to be an adjustment in the P&I premium base compared to the level it is on today.”

He emphasised that Gard was in a “strong position” despite the half-year loss, and was offering an owners’ general discount for the 2022 policy year of 5%.

The CEO said the trend towards increased claims severity looked set to continue.

“What we see is that a limited amount of large claims are getting more expensive, and that is something which is a trend, which will not disappear,” he said.

Gard has received more than 2,000 claims directly related to coronavirus, mostly crew claims.

Roppestad said the claims frequency for such losses was still high and had not yet abated, but he expected a decline in 2022.

He said the impact of indirect claims caused by crew fatigue was more difficult to measure, and that the amount of time some crew members had spent at sea had significantly increased the possibility of human error.

Quizzed on the implications of the Ever Given event earlier this year, the executive said a large containership disaster had been part of Gard’s scenario analysis for around 10 years.

“The world has been lucky not to have had a really big disaster on a large containership yet,” Roppestad said.

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree