Already we have seen significant consequences for global trade and the maritime industries. Supply chains are disrupted, energy and food prices are soaring, and hundreds of vessels have been trapped in the Black Sea, unable to escape the conflict. Once again, our seafarers are among those being hit the hardest. Add to that a sanctions regime that is increasingly difficult to navigate, and it is safe to say that we find ourselves in turbulent waters.
Strong results in challenging times
The Ukraine crisis comes on top of the Covid-19 pandemic, which had already given a shock to the global economy. Looking back at the financial year 2021, we got off to a challenging start, with significant outgoings resulting from a number of big claims. Some of these claims reached unusually high levels, partly as a result of delays and logistical difficulties presented by the pandemic. There was also a continuous inflow of claims linked to crew, many of which were caused by the pandemic. These claims ranged from sick pay and hospitalisation to, in the saddest cases, covering expenses related to deceased seafarers.
In spite of a turbulent year, however, Gard has managed to deliver extraordinary results. We recorded our highest-ever turnover of USD 1.036 billion – a clear vote of confidence in the services, insights, and expertise we provide. Strong results from fixed price P&I and our Marine and Energy book also mean that the group can deliver a robust profit and a net combined ratio of 94 per cent – strong achievements given the circumstances. Particularly uplifting is the continued growth within renewable energy – offshore wind now constitutes more than 30 per cent of our total premium earned in the energy segment, almost double what it was just a year ago.
Focusing on our people and expertise
Though the cost of claims is increasing across the industry, Gard has in relative terms seen a positive development in claims costs compared to the market over the last ten years. This reflects the ‘Gard mode of operation’: pricing risk correctly, having Members and clients with high-quality operations, and a claims team that shows deep expertise in everything they do.
In Gard, we know that it is our people that make the difference. That is why we continue to focus on the well-being and development of our employees and organisation. Throughout the year we have implemented strong HR policies and prioritised our work to promote Equality, Diversity and Inclusion (EDI). This year we conducted a comprehensive EDI analysis that will serve as the baseline for future work. Some gaps have been closed already; others will follow. We are not there yet, not as a company nor as an industry, but we continue to focus our efforts on this area.
Likewise, we will continue to push for data-driven solutions and insight-led decisions in underwriting, claims, and risk management, to the benefit of our Members and clients. Our industry is in the midst of a digital transformation, and we have probably only seen the start of it. New technology and the potential for improved analysis will only accelerate in the years ahead, and in Gard, we are a strong supporter of these developments. We will continue to be an advocate for increased and improved knowledge-sharing within the IG, CEFOR, and in other industry associations. All with one core purpose in mind: to minimize risks, prevent losses, and to enable sustainable maritime development.
As an example, Gard this year co-founded the Poseidon Principles for Marine Insurance. This initiative means that we will assess and disclose the climate alignment of our hull and machinery portfolio, benchmarking it against the emission targets set by the IMO and the Paris Agreement. Being a market leader, we have an opportunity – and an obligation – to be at the forefront, pushing for increased transparency and new solutions that can help enable a low-carbon future.
Maturing our thinking
My sincere hope for the year ahead is that we see more, not less, global trade and integration. If global society and business become fragmented, some will be left behind while others surge ahead. Those left behind will inevitably be those most dependent on export trade, and on foreign direct investment. It is only through the web of international trade and cooperation that we will solve the great challenges of our time.
In spite of the adversity the world faces in this third decade of the 21st century, Gard has the wind in its sails. This integrated report, the very first for Gard, shows that we are maturing in our thinking around our value creation and sustainability. I would like to thank our Members and clients, the Board of Directors, and the entire Gard organisation for the tremendous work they have done in yet another challenging year. I look forward to captaining the voyage ahead, and hopefully into a time of plainer and altogether more pleasant sailing.