The Club’s October Review 2013 provides the latest perspective on its financial position with a record of its half-year results. Graphical highlights can be found under "Financial Highlights" in the October Review section of the menu to the left of this text.
Overall, the Club’s financial position remains strong with the free reserves and capital standing at US$473million and total assets of US$1.6 billion at 20th August 2013.
Since the half year, 20th August, the position has improved. The Club’s investment income has increased from $6million to $33 million by late October.
The Club’s Standard and Poor’s rating remains at A- (Strong) Outlook: Positive.
Despite the prolonged shipping recession, the performance of both the Club’s 2012 and 2013 policy years indicates P&I claims have resumed their upward trend.
Alan Olivier, newly elected chairman of the UK P&I Club said:
“Our decision to make a 10 per cent general increase reflects the Board’s determination to keep the Club’s underwriting in balance. Facing a choice between relatively modest premium increases in the short term or more substantial and painful increases in future, the Board does not view the latter option as being in the best long-term interests of its Members or the Club.”
Release call percentages are reviewed at the UK Club's October Board meetings. At its meeting in October 2012, the Board determined that the release call percentages for the 2013/14, 2012/13, 2011/12, and 2010/11 policy years should be 15%, 12.5%, 5%, and 5% of mutual premium respectively. At its meeting in May 2013, the Board closed the 2010/11 policy year, removing the release call requirement for the 2010/11 policy year.
The release call percentages reflect an assessment of the risk that it could become necessary for the Club to make an unbudgeted supplementary call. The assessment is made in the context of evaluating the factors set out in Clause 8 of the 2013 International Group Agreement, namely premium risk, catastrophe risk, reserve risk, counter-party default risk, market risk and operational risk. Release call percentages will be reviewed again at the October 2013 Board meeting.
Table of release call percentages over policy year review dates
|May 2013||Oct 2012||May 2012||Oct 2011||May 2011||Oct 2010|
IRS Closing Agreement
The UK Club has entered into a closing agreement with the United States Internal Revenue Service (IRS). This closing agreement secures exemption for the Club from Section 4371 Excise Tax, which applies to insurance premiums paid to a foreign insurer or reinsurer when the exemption is based on the provisions of an income tax treaty to which the United States is a party. The UK Club is now listed on the IRS website as a party to a closing agreement with the IRS.
For more information on the IRS closing agreement, please see the IRS website http://www.irs.gov/Businesses/International-Businesses/Exemption-from-Section-4371-Excise-Tax
October Review 2013
Circular 15/13: Review of open policy years
Electronic publishing of financial statements in 2013
With effect from 20th February 2013, the UK Club’s Directors’ Report and Financial Statements will be distributed solely in electronic format.
It will be published on the Club website as a PDF for download by Members.
Any requests for physical copies in support of discussions with regulators and governmental agencies should be directed to your usual Club contact.