A purely maritime insurance company
2019 was Alandia’s first year since the 1960s as a purely maritime insurance company. We maintained a good level of premium growth right across our insurance divisions, and all product segments experienced growth, obtaining new customers.
Financially speaking, it was an unusually polarised year. Overall, financial results were somewhat weaker than forecast in 2019. The technical result of insurance operations was significantly lower than expected, while the result of investment operations was much higher than expected.
The Yacht Insurance segment achieved good results in Sweden and Finland as a whole, while in Norway its results were fairly poor. In the Hull and Machinery segment, certain markets were very weak, while others reached a satisfactory level. The P&I, Cargo Insurance and Statutory Accident segments suffered the impact of
one major claim during the year. However, only a few claims were large enough to exceed the company’s retention.
In terms of operational development, we have been able to focus on a much less diversified range of insurance products, which saves resources. The chance to streamline our business has had a positive effect on the company, permitting us to focus on optimising work processes and IT systems. We also made significant
investments into loss prevention in 2019, which will later become evident to our customers.
Overall, the hull and machinery insurance sector has seen a significant increase in claims, particularly in largescale ones, in recent years. Alandia has also been impacted by several of these major, serious claims. A number of larger fires in cargo and engine rooms stand out among these cases, as they are often relatively
consequential in scope and therefore can lead to costly repairs or complete write-offs. A sector-specific problem that has arisen in Sweden is boat engine thefts, which have also affected us. The impact of these fire and theft-related claims is already visible in premium pricing. This means that there is an even greater need for damage prevention efforts to help our customers reduce these costs.
As a result of several years of press on the market, leading to excessively low premium rates, a number of international players left the hull and machinery insurance market during 2019. A significant improvement in market pricing was seen during the year, especially the second half, thanks to a generally healthier risk appetite.
Through our associated company, Nordisk Marinförsäkring, we gained several new brokerage partners in the continental European market. This has led to new hull and machinery customers in that market.
The digital customer journey for yacht insurance customers became more comprehensive and clearer in 2019. These days we offer everything from digital marketing and a web shop for customers to take out and pay for their yacht insurance directly, to digital communication through their personal “My Pages”. Both the web shop and My Pages functions were revamped during the year, and will continue to be improved in terms of the customer’s ability to communicate with Alandia.
At the end of 2019, the company made a deal with Aktia Life Insurance, agreeing that Aktia will take over Alandia Life’s entire portfolio of life insurance products during the first quarter of 2020. This deal is still subject to approval from the Finnish Financial Supervisory Authority. The transfer will allow Alandia to further focus its internal resources on the maritime insurance business.
Our customer growth in 2019 demonstrates that there is clear demand among customers for a purely commercial maritime insurance operator, which both nurtures its customer relationships and bears its insurance risks. Such operators number few on the market. I therefore predict a continued healthy level of growth for Alandia, although at a more moderate rate than in the last two years. Recent years have demonstrated that we can now also achieve a scalability in our business that benefits both our customers and the company, in that our operating cost ratio has already significantly fallen and will continue to decline further.
Finally, I would like to take this opportunity, on behalf of myself and all of Alandia’s personnel, to thank all of our customers, partners, board members and shareholders for their continued good cooperation in 2019. Alandia’s entire personnel look forward to further developing the company in 2020, based on our customers’ needs.