THE UK P&I Club, one of the oldest shipping protection and indemnity insurance mutuals, has ended its financial year on February 20 with a surplus of US$11 million.
The club's free reserves and capital increased to $486 million, placing its financial strength at the top level of its peer group in the P&I sector with total assets standing at $1.6 billion. The club said investment return was reduced to 1.5 per cent as it de-risked its portfolio.
The club said that the financial year showed an improved claims trend supported in part by falling claims frequency since 2008, but sounded a warning bell that underlying claims inflation over the longer term has been between five and 15 per cent.
According to the rating agency, Standard & Poor's, the club's outlook remained stable with its rating at A minus.
"This very positive result demonstrates the club's commitment to its long-term target of maintaining a combined ratio of 100 per cent or below," said club chairman Dino Caroussis.
"Our return to the top level of the P&I market has been rewarded by increased support from new and existing members. Tonnage was up over the year and now stands at 112 million gross tonnes of owned tonnage and around 80 million gross tonnes of chartered tonnage," he said.
Hugo Wynn-Williams, chairman of Thomas Miller P&I, the club's managers said: "Where shipping markets remain depressed, the total cost of claims is expected to remain lower. While improvements in regional markets such as intra-Asian trade or in particular shipping sectors could change that outlook, the club will ensure that premium levels match likely claims trends at subsequent renewals."
