For the first time in five years, the West of England P&I Club, an insurance provider to the global maritime and offshore industries, has reported that it has returned an underwriting surplus in its 20 August financial results, with a combined ratio of 97.9% at the mid-year point.
West of England P&I Club gross premium increased to around $285 million, the firm’s highest ever level according to CEO Tom Bowsher.
The firm also reported an investment return of minus 2.9%, it noted that the actions of Central Banks to moderate inflation caused fixed income and equities to post negative returns for the first half of the year.
It was the Club’s asset-liability matching strategy that protected the Club’s solvency position from these turbulent market conditions, the firm highlighted. The solvency coverage remains around 165% and the Club’s capital strength was again re-affirmed by Standard & Poor’s A- rating in August.
In their announcement, the Club stated that its claims for the current Policy Year were substantially lower than forecast due primarily to an exceptional six months for the International Group Pool with no claims notified across the whole Group.
Additionally, it pointed out that the claims for prior years have developed more favourably than expected notwithstanding latent Pool claim development from other Clubs.
Bowsher commented: “The decisions taken at the 2022 renewal were extremely difficult for a Club that prides itself on the strength of its relationships but our Members understood the reasons.
“This has been backed by strong support in the current Policy Year with our gross premium increasing to its highest ever level at around US$285 million. Our diversified product lines continue to grow and contribute to the Club’s surplus and our global team works seamlessly to ensure we are well positioned to support our Members’ needs.”
According to Francis Corrigan, CFO at West, the “robust and decisive action” taken at the 2022 renewals have had the desired effect on the Club’s operating performance.
Corrigan added: “It is not a time for complacency, however. Inflationary pressures are growing and West’s result, like all Clubs, benefits from what is an exceptional Pool year so far. While this is welcome for the industry, it cannot be expected to be repeated.”
