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Gard issues status report for first half of 2020

Despite the negative results, Gard is well capitalised and within its target range

Posted on: 6 November 2020

Marine P&I insurer Gard has announced that as at 20 August 2020, on a consolidated basis, the financial position of the Gard group remains robust and healthy. This is despite the half-year results being negatively affected by several major incidents within the International Group Pool, and spread of the COVID-19 pandemic.

Gard’s Board of Directors has also authorised that the last premium instalment for the 2019 policy year be set at of 15 % per cent of the original Estimated Total Call, which represents a 5% reduction on the agreed ETC at renewal.

Despite the negative results, Gard is well capitalised and within its target range. The first half of the 2020 financial year has tracked the global spread of the COVID-19 pandemic and the results have been negatively affected by its impact on both the shipping and financial markets. Additionally, several major incidents within the International Group Pool have incurred significant claims costs. As an organisation, the Club’s priorities in these difficult times have been to focus on its customers, social responsibilities around the world and the welfare of employees. Like many businesses, Gard shifted to remote working and has continued to support and sustain Members, clients and the operations of the Gard group.

The results for the Gard group at 20 August 2020 are:

  • A loss after tax of USD 62 million on an Estimated Total Call (ETC) basis
  • The technical result is a loss of USD 54 million
  • The Combined Ratio Net (CRN) is 116 per cent
  • The non-technical result is a loss of USD 9 million, including taxation and other comprehensive income/loss
  • Equity of USD 1,117 million

The half year results have been significantly impacted by a steep rise in claims in the mutual P&I business line. The increase mainly comes from Pool claims from International Group Clubs, but also Gard’s own mutual portfolio has performed below expectation. Conversely, the results from the for-profit lines of business are positive and better than expected for the first half year of 2020.

The pandemic’s impact on the financial markets led to investment losses in the first quarter of 2020 which have now largely been recovered. Gard has a moderate exposure to equities to reduce the risk of large losses from the investment portfolio.

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