An agreement has been reached between Randall & Quilter Investment Holdings Ltd. (R&Q) and UK P&I Club, under which the former is set to assume the latter’s occupational disease liabilities, subject to approval by the High Court in London.
UK P&I Club is to transfer its occupational disease liabilities, which total $103.8 million on an undiscounted basis, to ensure the interests of those members who are exposed to these claims and, equally the claimants who suffer from these diseases are not prejudiced by the transfer.
The transfer to R&Q will be overseen by the UK insurance regulators, the PRA and FCA, and is expected to be completed within the next two years.
It’s also been revealed that in the interim, R&Q has completed a reinsurance agreement with UK P&I Club so that the benefits of the overall deal can be recognised by the Club’s current membership.
The announcement explains that the majority of occupational disease claims result from seafarers being exposed to asbestos on ships, a disease which can take 40 years or more before any symptoms show, which can often be fatal, while the resulting compensation awards can be substantial. R&Q notes that these claims can be both uncertain and volatile, with the exposure set to continue for many years in the future.
Ken Randall, Executive Chairman at R&Q commented: “We are delighted to enter into this agreement with the UK Club which recognises our experience in this field and follows on from the previous transfer of liabilities from the Liverpool & London Steamship P&I Association in 2015. Occupational disease liability can negatively impact a Club’s capital outlook and risk appetite.
“This transfer agreement will allow the UK Club more flexibility and stability in planning its financial future, while ensuring any claimants remain unaffected.”
Andrew Taylor, Chief Executive Officer (CEO) of UK P&I Club, added: “Transferring these claims to a recognised and well-regarded occupational disease specialist, such as R&Q, will significantly improve the Club’s capital position and bring finality to a highly volatile book of claims. This will greatly benefit the Club’s current members.”
