Good year for American Club

The American Club had a “very good year” in 2010, members of the P&I mutual heard at its  annual meeting in New York yesterday. The club began 2011 with a strong and stable membership and significantly increased free reserves. Statutory surplus grew by 50 percent to $72.2 million during the year to December 31, while the GAAP figure increased by 32 percent to $63.6 million.

The club’s policy of careful risk selection and loss control was reflected in the level of incurred claims for the club’s own account. This, together with solid investment earnings, enabled the club to strengthen its finances and consolidate its platform for further development in the future. The club posted an investment return for 2010 of 7.7 percent in spite of the difficult economic climate. This was supported by strong earnings in the equities sector and a continuingly favorable municipal bond performance. The value of  cash and funds under investment grew by about 17 percent over the period.

A the operating level, net premium earnings grew by about 2 percent to $105 million compared with the prior year, but net incurred claims fell to $69 million from $76 million, a reduction of over 9 percent. Operating expenses, as ] in the prior year, showed a reduction of about 2 percent. 

While net interest and dividend income, and realized investment gains, were some $7 million higher in 2010 than in the previous year, unrealized gains were lower. Still, the surplus of income over expenditure for the year, at $15.3 million was 20 percent higher than in 2009 ($12.7 million).

Optimism for the future
Commenting on the year, the club’s chairman, Arnold Witte of Donjon Marine Co., Inc., said: “2010 was another challenging year.  However, as has been consistently the case over recent years, a significant improvement in the club’s fortunes was achieved. The club’s technical fundamentals are sound, its core business is performing well, its operational capabilities are at the leading edge of market practice, and its global reach is second to none. The progress which has been made by the American Club during 2010 financially, and in terms of membership development and service delivery, point to a bright future.”

Joe Hughes, Chairman and CEO of the American Club’s managers, SCB Inc., echoed Mr. Witte’s remarks: “Notwithstanding a difficult business environment, and the still fragile state of the global economy, 2010 was a very good year for the club. Its underlying claims exposures improved significantly, its rating levels remained firm, its investments performed well, its membership base expanded, and its free reserves increased substantially.”

“These trends have continued into 2011,” said Mr. Hughes. “Growth in the Asian sector has been particularly robust, and owners from this region now account for some 34 percent of the club’s entered tonnage, up from 25 percent a year earlier. However, the club’s other core constituencies in Europe and North America continue to advance and remain a vibrant source of membership support and development.

“In particular, it has been very encouraging to see a further increase in the club’s free reserves during the first quarter of 2011. Record statutory and GAAP figures of, respectively. $75.5 million and $70.2 million were recorded at March 31, 2011, the GAAP figure being 10 percent greater than it was only three months earlier.”

Mr. Hughes concluded: “The progress made during 2010, and into the early stages of the current year, provides a firm foundation for future development. This development, which looks to the club’s centennial in 2017, has been articulated in a new strategic plan. This builds upon the enormous progress achieved since the club embarked on its Vision 2000 initiative some 15 years ago. 

“To achieve its future goals, the American Club will continue to rely upon the energy and enthusiasm which have driven its extraordinary transformation since the mid-1990s, and which form the enduring core of its outlook for the future”. 

June 24, 2011