Protection & Indemnity

Gard | www.gard.no

P&I only, income and expenditure summary, highlights:

  • Owned mutual tonnage increased by 1.4%
  • P&I Premiums reduced by 12.5%
  • Reinsurance premiums reduced by 14.5%
  • Gross paid claims increased by 6.2%
  • Net incurred claims reduced by 7.5%
  • USD 37.9 million underwriting surplus.
  • The very positive result was achieved despite the reduction in the 2016/17 deferred call from 25% to nil (equating to USD 89.9 million reduction in premium).

Gard Group, balance sheet summary, highlights:

  • Investment return of approximately 4.7%
  • Gard Group assets increased by 1.4%, free reserves increased by 12.4%

Combined Ratio

Gard’s P&I (only) Combined ratio, including the 2016/17 reduction in deferred call, was 91%. Had the full estimated total call been made in 2016/17, the P&I combined ratio would have been 75%.

The Gard Group’s combined ratio for 2016/17, as the premium was actually charged, was 95%. Had the full estimated total call been made in 2016/17, the Gard Group combined ratio would have been 83%.

Consolidated Financial Year Summary (USD 000s)

Gard P&I only income and expenditure summary 2014/15 2015/16 2016/17
Income and Expenditure
Calls and Premiums 628,672 607,260 531,601
Reinsurance Premiums -132,615 -137,214 -117,371
Operating Expenses -59,723 -50,494 -50,752
Operating Income 436,334 419,552 363,478
Gross Paid Claims 422,066 411,716 437,152
Net Paid Claims  n/a   n/a   n/a 
Net Change in Provision for Claims  n/a   n/a   n/a 
Net Incurred Claims 425,970 351,938 325,585
Technical Surplus (Deficit) 10,364 67,614 37,893
Investment Income  n/a    n/a   n/a 
Overall Surplus for Year (Deficit)  n/a   n/a   n/a 
 
Gard Group balance sheet summary
Balance Sheet
Net Assets 2,211,503 2,255,363 2,287,205
Net Outstanding Claims 1,250,883 1,245,249 1,152,343
Free Reserves 960,620 1,010,114 1,134,862
Entered tonnage (GT, millions) 2015 2016 2017
Owned/Mutual 189 199 200
Owned/Fixed 19 16 17
Chartered/Fixed 58 90 90
Total 265 305 306.6
(MOU: Mobile offshore units)
       
S&P Rating History 2015 2016 2017
   A+*   A+*   A+* 
       
Average Expense Ratio (AER) 2015 2016 2017
Five years ending 20 February 11 12 12

Combined Ratio

Combined ratios provide a direct comparison of club underwriting performance. The combined ratio is essentially the net loss ratio for the club and is defined as follows:

Combined ratio =

(Net incurred claims + operating expenses)
(Premium – reinsurance costs)
  • A combined ratio of 100% represents an underwriting break-even position
  • Anything in excess of 100% would be an underwriting loss
  • A combined ratio less than 100% would represent an underwriting surplus.

NB Gard’s basis of disclosure

Gard changed their basis of reporting the P&I class of cover in 2010/11. Gard P&I underwriting results continue to be partially provided, but the club has progressively reduced the amount of information disclosed.

Since 2014/15 Gard has only published the combined Gard Group results for net paid claims, net change in the provision for claims, investment return, assets and free reserves (i.e. the combined results for P&I, Marine and Energy). In the table above we show the Gard P&I class underwriting results to the fullest extent disclosed. We therefore use Gard ‘Group’ figures for investment income, assets and free reserves.

To provide a meaningful comparison, the figures used in the financial graphs opposite represent Willis analysts’ estimates of solely the P&I proportion Gard’s investment income, assets and free reserves.