To the Members of The Shipowners’ Mutual Strike Insurance Association Europe
In accordance with our duties as Directors of The Shipowners’ Mutual Strike Insurance Association Europe (“Strike Insurance Europe”), we hereby present the statutory accounts for the year ended 20 February 2021.
The technical account shows a profit of $99.898, with an overall profit of $13.579, compared with the period ended 2020 which produced a technical loss of $1.727.742, with an overall loss of $1.775.484. Gross calls, before reinsurance, decreased from $21.048.177 in 2020 to $586.321 in 2021 and gross claims paid decreased from $22.978.970 in 2020 to $5.532.952 in 2021. Gross provision for claims decreased from $8.465.403 in 2020 to $1.975.343 in 2021. Net of reinsurance, the claims in the technical account were a net credit of $59.375 in 2021, compared with a net cost of $1,082,639 in 2020.
Strike Insurance Europe’s activity during the period was in conformity with its statutes. Strike Insurance Europe remained invested cautiously and no derivative products were bought. Strike Insurance Europe does not face abnormal price, credit, liquidity or treasury risk and did not incur any research and development expenses. Strike Insurance Europe has a UK branch office in The Minster Building, 21 Mincing Lane, London, EC3R 7AG.
Over the last few years, the board and managers continued the transformation of underwriting, business development and operational structure to deliver greater efficiency to members. Strike Insurance Europe became part of the Standard Club group with effect from 1 February 2019 following approval by Strike Insurance Europe members in general meeting on 8 November 2018. Strike Insurance Europe ceased underwriting on 20 February 2020 and from 21 February 2020 the former Strike Insurance Europe members have been able to buy strike & delay and war risks insurances from other insurers in the Standard Club group. Strike insurance Europe continues to meet its obligations to members insured for the 2019/20 and earlier policy years, with Standard Reinsurance (Bermuda) Ltd supporting it as quota share reinsurer.
One further efficiency improvement would be for Strike Insurance Europe to seek approval from the Luxembourg and Irish insurance regulators to transfer its insurance obligations to Dublin-based The Standard Club Ireland DAC which now insures strike & delay and war risks and which, like Standard Reinsurance (Bermuda) Ltd, has a published “A” financial strength rating from the financial rating agency Standard & Poor’s. Strike Insurance Europe is discussing this plan with the Luxembourg and Irish insurance regulators with a view to trying to complete a portfolio transfer before February 2022 and, given the plan to close Strike Insurance Europe, the financial statements for the year ended 20 February 2021 have therefore been prepared on a non-going concern basis of accounting.
The directors have been monitoring the development of the impact of Covid-19 both directly on the club’s affairs and indirectly through the development of government policy and advice. The Association insures only limited aspects of the effects of Covid-19. In addition, by taking the decision to cease underwriting all policy coverage ended on or before 20 February 2020, before most countries saw major disruption. Up to 20 February 2021, only three valid Covid-19 claims were notified to the Association, with an aggregate estimated cost of USD 0.2m. At 20 February 2021 and 20 February 2020, the Association held no investments other than cash at bank, so it did not suffer from investment market volatility.
We propose that you approve the balance sheet and the statement of profit and loss as presented to you.