Claims
The 2015 policy year continues to perform very well and, but for one large claim, would have been on track to equal the 2011 year as one of the best years on record. The 2015 policy year benefited from relatively low incidence of illness and casualty claims, one being driven by the state of the shipping market and the other by more random events.

So far, the 2016 policy year has also shown a favourable experience compared with forecasts. However, there has been a small increase in the number of low value claims in 2016 compared with the last two years. It is too early to draw conclusions but with the average cost of an “attritional” claim continuing to rise at around 4% per annum the club remains aware of the possibility of a more expensive claims environment in the future.

Capital
There has been a modest increase in the total capital of the Club to $571 million at the half year. The Board of the Club pays close attention to the management of the Club’s capital against the background of market conditions faced by shipowners. The approval earlier this year by the Prudential Regulation Authority of the Club’s internal model, which is tailored to the Club’s specific needs, has had the effect of reducing our solvency capital requirement. The creation of this model is an excellent example of our determination to steer a course between maintaining a capital strength which delivers long term stability, and ensuring that the Club does not need to hold more of Member’s funds than is necessary.

Claims
The 2015 policy year continues to perform very well and, but for one large claim, would have been on track to equal the 2011 year as one of the best years on record. The 2015 policy year benefited from relatively low incidence of illness and casualty claims, one being driven by the state of the shipping market and the other by more random events.

So far, the 2016 policy year has also shown a favourable experience compared with forecasts. However, there has been a small increase in the number of low value claims in 2016 compared with the last two years. It is too early to draw conclusions but with the average cost of an “attritional” claim continuing to rise at around 4% per annum the club remains aware of the possibility of a more expensive claims environment in the future.

Capital
There has been a modest increase in the total capital of the Club to $571 million at the half year. The Board of the Club pays close attention to the management of the Club’s capital against the background of market conditions faced by shipowners. The approval earlier this year by the Prudential Regulation Authority of the Club’s internal model, which is tailored to the Club’s specific needs, has had the effect of reducing our solvency capital requirement. The creation of this model is an excellent example of our determination to steer a course between maintaining a capital strength which delivers long term stability, and ensuring that the Club does not need to hold more of Member’s funds than is necessary.

Risk Management
One of the greatest challenges to the stability of the Club is presented by the incidence of high value claims – those with a total cost over $0.5 million – where a relatively small number can bring, even in an average year, significant volatility to total claims cost. The Club has been active in looking at new, progressive ways of managing this risk, including through rigorous processes of risk analysis and loss prevention, as well as the creation of an efficient reinsurance programme. I am confident that the UK Club stands out amongst its peers for being at the leading edge in the use of these techniques in the industry

Service
At the heart of our first-rate service lies the quality and experience of our people. Nowhere is this more evident than in the positive results that our Members see in their own claims events. In July, the US 3rd Circuit Court of Appeals issued their judgement in the case of the Athos 1, ruling in favour of the Member in a case which arose in 2004. The qualities of persistence and creative case management that underpin this and the many other positive case outcomes that our Members see are the product of the Club’s investment in its people and the know-how that has been built over many decades of leadership in this area. Equally, the Club’s underwriting department enjoys the trust and respect of a market which relies on a thorough understanding of risk and pricing, backed up by efficient processes and timely response.

In the coming year, we will be carrying out the next Member’s survey aimed at reaching an even better understanding of where we can be taking the Club’s service proposition in the coming years.

Growth
Six months ago, I reported a positive renewal in terms of a notable increase of quality tonnage. I am pleased to say that interest in the UK Club continues to be evidenced in further growth throughout the year. Scale is an important factor in the economy of any P&I Club, and we are in the fortunate position that the UK Club enjoys an outstanding reputation as a strong, stable and high quality provider of P&I insurance. Existing Members are growing their entries, and new Members are attracted to bring ships to us. However, we have always said that we do not believe in “growth for growth’s sake”, and the Club maintains its commitment to quality of Membership and robust underwriting as basic principles for the sound management of our mutual Club.

Governance
At the Annual General Meeting in November, the Membership voted to change the Club’s governance arrangements. The changes will enable the Board to meet the growing demands of managing a regulated insurance business without losing sight of the needs of the wider membership.

A Members’ Committee comprised largely of the same shipowner directors who served on the previous regulated Boards had been created to focus on issues relating to the shipping industry and decisions of the Club on matters that more directly affect the Members. I fully anticipate that this initiative over time, will result in a strong an influential collective voice being heard both within the Club community and also more widely in the industry.

Separately, the decision of the British electorate in the UK Referendum to leave the European Union may require the Club to establish a presence in Europe to enable it to write business for Members whose base of operations is in a country in the EU. Your Board is considering options for the location and scale of such a presence, and will make a decision which takes into account the practical implications of continuing with management operations both in London and in Bermuda.

In the course of this year we have said farewell to Smain Ghomri,Costis Kertsikoff, Y.C. Ng, Paul Pathy, Kathryn Siggins and Hideyuki Takahashi,who have loyally and energetically served the Club since their election to the Board. We thank them sincerely for their contribution to our business.

Looking forward
It was a great disappointment to me and my fellow Directors that we could not achieve agreement with the Britannia Club on the terms of a merger. However, the fundamental ideas of capital efficiency, economies of scale and investment in value added services on which we based the merger initiative remain valid. Members should feel assured of our continued dedication to these objectives.


Pre 2016 Financial Statements

Past editions of the Club's financial reports are here.


Emergency Contacts


If you need to call our offices out of hours and at weekends, click After Office hours for a up to date list of the names of the Duty Executives and their mobile phone numbers. 

Ship Finder


This Ship Finder is updated on a daily basis. Members who need to advise the Club of updates to their recorded ships' details should advise their usual underwriting contact.