12 per cent return premium announced in Annual Report 2020
Norwegian Hull Club has announced a proposed 12 % return on premium in its Annual Report 2020, which was published today (7 April 2021).
This proposal will be presented to the Committee and finally decided by the Annual General Meeting, in connection with adoption of the annual accounts, on 8 June 2021.
As a mutual marine insurance provider, Norwegian Hull Club delivers various benefits to its members including return of premium when the capital position and operating results allow. This is a recognition of the members’ long-term commitment to The Club and of their belief in the service concept as a driver for sustainability and saved costs.
The report states that the 12 % return premium amounts to USD 14.2 million. The proposal from the Board of Directors will be presented to the Committee and finally decided by the Annual General Meeting, in connection with adoption of the annual accounts on 8 June 2021.
An extraordinary year
In his CEO Review, Norwegian Hull Club CEO Hans Christian Seim highlights that 2020 has been an extraordinary year. He reflects on the many challenges that COVID-19 has created for the world and the industry, but also the opportunities arising in terms of building new knowledge, as well as the use and development of new technology to better enable the journey towards a sustainable future.
The combination of a recovering marine and energy market, less available capacity and the absence of major claims, led to an extraordinary technical result for 2020. However, Norwegian Hull Club believes the marine and energy market needs further strengthening before it has fully recovered - a belief that The Club notes is also subscribed to by Lloyd’s of London in its preliminary results. While the first half-year was characterised by substantially lower claim costs compared to 2019, Q3 and Q4 were more in line with expectations, impacted by Loss of Hire losses of which some related to consequences of COVID-19. An absence of major claims was a key factor in the reduction of claims costs reported.
Sustainable initiatives
Concluding his CEO Review, Seim draws the attention to Norwegian Hull Club’s mission statement as the foundation for its sustainable approach and initiatives. He invites The Club’s clients and other business partners to engage in further cooperation to help protect the vulnerability of both people and the ocean.
Annual and Sustainability Report 2020
Practical information
In order for us to be able to proceed with the payment of return premiums as quickly and efficiently as possible following the Annual General Meeting, The Club requires endorsements and closing documents on all 2020 business (at risk in 2020). We therefore encourage clients and brokers to provide such outstanding documentation as soon as possible.
An e-mail with all the underlying details will be sent to brokers and members in June and Norwegian Hull Club will then start paying out the return premium as soon as bank account details are received in return. If you have any questions regarding the return premium, contact your designated underwriter or check the Q&A section listed below.
Q&A
Q: Which article in the Articles of Association is the basis for decision on and calculation of return premium?
A: Return premium is regulated by § 3-2 of the Articles of Association, stating:
“If the total premiums and other income of the Club are found to be in excess of that required to cover the claims and costs of the calendar year, the Club may decide that the surplus, wholly or in part, shall be repaid to the members in the calendar year in question by way of a pro rata discount to be stipulated in proportion to the net advance premiums for that calendar year.
"It is not permissible to declare higher return premium than proposed or accepted by the Board of Directors.
"Repayment to Joint Members is to be sent to the member named first in the insurance agreement.”
Q: For which period is the return premium earned?
A: Return premium is based on mutual premium earned by Norwegian Hull Club during the 2020 calendar year, see § 3-2 referred to under the first question. This premium can also relate to previous underwriting years which were at risk in 2020.
Q: To whom shall return premium be paid?
A: Return premium shall be paid to the member, See § 3-2. In case of Joint Members, return premium is paid to the members named first.
Q: Will return premium impact commission to brokers?
A: No.
Q: Will a former member who was member for a part of the calendar year be entitled to return premium?
A: Yes, see § 3-2.
Q: Is estimated but not reported premium on war covers included in the basis for return premium?
A: No, only calls declared, and premium calculated thereon form the basis for return premium.
Q: When will repayment of premium be made?
A: Shortly after the Annual General Meeting, to be held on the 8th of June.
Dated: 7 April 2021
Norwegian Hull club is a mutual marine insurance company serving members and clients worldwide. The Club provides an integrated claims-leader service, as well as a diverse portfolio of covers for Hull and Machinery, Loss of Hire, Total Loss, War, Builders’/Construction Risks, Special Risks, P&I and FD&D. The integrated claims-leader service includes – but is not limited to – efficient claims handling, emergency response and loss-prevention activities.