The Swedish Club returned to positive results in 2003. Managing Director Frans Malmros told the Club’s Board of Directors’ meeting in Singapore, April 2, that a two-year programme to restore balance between premium income and claims costs had achieved its objective. The Club’s performance was stronger than that forecast 12 months earlier. This successful outcome has been recognised by an enhanced S&P rating.

Frans Malmros also reported a satisfactory outcome to the P&I renewal. A new emphasis on risk reduction shaped the renewals process and reinforced the Club’s traditional focus on quality. There was little net change in the P&I-entered fleet. On completion of the renewal the P&I portfolio stood at 686 vessels of 14.6 million GT, as against 714 vessels of 14.8 million GT 12 months earlier. There was a substantial increase in the FD&D book, from 207 ships of 5.5 million GT to 249 vessels of 7.2 million GT.

There was also major change in The Swedish Club’s hull portfolio. The hull fleet amounted to 883 ships of 27.7 million GT at the beginning of 2003. This portfolio had increased to 1,138 vessels of 38.3 million GT by the year’s end – an increase of 29 per cent and 38 per cent respectively. The Club welcomed 14 new hull members during 2003. The successful negotiation of satisfactory reinsurance terms contributed to the Club’s growing competitiveness in the hull market.

Higher premium income, significant currency gains and a strong investment performance in 2003 produced an operating result (before appropriations and tax) of $22.5 million, as against a deficit of $3.9 million in 2002. Frans Malmros told the Board that this “heartening progress” had permitted replenishment of the Club’s free reserves, which now stands at $81.5 million.

The Club experienced a satisfactory year on the claims front. There were fewer claims than anticipated and the cost was less than forecast. This trend was most marked in the hull context, with higher deductibles and a refined portfolio contributing to the reduction in claims numbers and costs. Strict quality criteria were applied for new entries and at renewal.

Commenting on the outlook for 2004, the Club’s Managing Director emphasised that a successful outcome depended largely on maintenance of balance between premium income and claims costs. This insulates the Club from fluctuations in investment performance, year on year. Frans Malmros said that there is a good chance of positive results in 2004, even in a scenario of more typical investment returns.

During the Board meeting Frans Malmros also reported progress in two vital areas: the introduction of the Club’s new team-based organisation in October 2003 and the major programme now under way to evaluate ship management quality across the membership. This has been identified as the single most important influence on claims record.

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For further information, please contact The Swedish Club
Frans Malmros, Managing Director, Tel: +46 31 638 400
E-mail: frans.malmros@swedishclub.com

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