London weather is famously unpredictable. That’s why umbrellas are a common sight in the city, no matter the time of year. But over at the UK P&I Club, the outlook is assuredly sunny following the public release this week of the Club’s results for the year ended 20th February 2010. Chairman Dino Caroussis says the Club not only successfully weathered the storms of the last 18 months but has gained in financial strength – thanks in large part to a drop in claims, including crew claims for injury and illness.
This is fabulous news for member shipowners and even for the shipping industry in general. A quick rundown of the Club’s financial and performance highlights:
* Free reserves and capital increased to $409 million from $334 million
* Investment return over 8%
* Policy year deficits of 2006 and 2007 effectively eliminated
* General increase for Club members in 2010 levied at 5%, lower than previous years
* Confidence and loyalty to the Club remain high; 1.5 million gross tons of new entries have joined in the past three months
* Increased claims retention – the threshold for Pooling claims with International Group clubs – raised to $8 million each claim
* New comprehensive reinsurance programme to protect against single major losses and adverse aggregation of claims at Club and Pool level
* Club well prepared for Solvency 2
* Strong focus on risk management and corporate governance
* Maintenance of S&P A- (Stable outlook) rating with strong capitalization and very strong capital adequacy.
Above table shows the net notified claims by category at twelve months’ development. This shows how the cost of people claims (illness and injury categories) increased significantly up to the 2008 policy year, and has since fallen back due largely to a marked fall in the frequency of such claims. [Source: UK P&I Club Review of the Year]
Claims levels in the 2009 policy year started to show the reduction that the Club had expected as a result of the slowdown in most world shipping markets. “This is of great significance,” says Mr Caroussis, “as lower claims mean that our goal of achieving balanced under-writing, with a combined ratio of 100 per cent, is made easier without the need for more substantial premium increases.”
Having toughed it out despite uncertainties in the world economy and a stricter regulatorary background, the UK P&I is clearly facing the future with confidence. Don’t count, however, on the umbrellas disappearing. The weather can still be quite quirky. ~Barista Uno
