SWEDISH CLUB SHARPLY CUTS ITS LOSSES

SWEDISH CLUB SHARPLY CUTS ITS LOSSES

The Swedish Club, a leading hull and liability insurance mutual, on Wednesday announced a 1989 operating loss after reinsurance of 6.2 million Swedish

kronor, ($1 million), against a 35.9 million kronor loss the previous year.

The improvement was helped by a near 34 percent reduction in claims made to the Gothenburg, Sweden-based club. Claims issued against the Swedish Club were 342.2 million kronor in 1989, down from 516.5 million kronor in 1988.Premium income was almost 19 percent lower at 259.6 million kronor, although some of this decline came from the transfer in 1989 of 10 percent of the club's business to its new subsidiary, the Swedish Club Luxembourg.

Lars Lindfelt, managing director of the club, said that while protection and indemnity (P&I), or liability, results showed some deterioration in line with the experience of other mutuals, the main problem area for the club remains hull insurance.

In this very competitive market sector, marked by insurance overcapacity and lower premium levels in recent years, the club made a loss last year of 53.2 million kronor, although this was an improvement on a 1988 loss of 87.0 million kronor.

Commenting on prospects for 1990, he said that while current tonnage registered with the club's hull account is lower - 11 million gross tons against 11.9 million a year ago - it is the better managed tonnage that has remained. There also have been indications, although Mr. Lindfelt said he was

uncertain as to their reliability, that hull premium rates are hardening.

Tonnage registered with the Swedish Club for P&I protection rose last year by about 1 million tons to 6 million gross tons.

Mr. Lindfelt said that steps taken by the Swedish Club's board at the Jan. 1, 1990 renewals to eliminate or limit losses on the hull account from the current underwriting year should filter through to better results.

He was referring to a change in the club's rules whereby the minimum amount of risk that an owner needs to register with the club was reduced from 75 percent of the vessel's value to 25 percent. Mr. Lindfelt said that while there had been some loss of tonnage registered as a result of the rule change, it was the less desirable tonnage that had gone.