A Strong result
The Club has produced a surplus this year of $30 million which, together with the foreign exchange differences, takes the Club’s total free Reserves and hybrid capital to a new high of $528 million; this is made up of underlying free reserves of $430 million and hybrid capital of $98 million. The year benefited from a favourable release of claims reserves from previous policy years, but this was partly offset by a more costly 2013 policy year. In addition there was a healthy investment return of $44 million (4.5%) after taking into account foreign exchange movements.
The financial year combined ratio of 102% represents the fourth consecutive year of combined ratios close to the Club’s target of 100%. This combined ratio includes a significant release of claims reserves on older policy years, particularly 2011 and 2012, as a result of favourable results on a number of large casualty claims, combined with a generally better than expected development on claims in other years.
Standard and Poor’s rating
Following the annual review with Standard and Poor’s in April, it was confirmed that the Club’s rating had been upgraded to a full A (Stable) rating. This welcome resolution of the Club’s previous A- (Positive Outlook) rating was in recognition of the progress made by the Club both in strengthening its capital and also in delivering a consistent underwriting result.