At the half year, the UK Club holds free reserves and hybrid capital of $559 million. The surplus achieved in the first six months of the year contributed to this increase in free reserves, despite uncertainty in global investment markets.
The low number and cost of notified claims on the 2015 policy year is encouraging with few large claims falling within the Club or Pool retentions. Notified claims on prior policy years have also developed favourably.
Underlying claims inflation is currently running at around 4% per annum, however this has been offset by the continuing reduction in claims frequency. Although moving the premium forward to meet claims inflation remains a key objective of the Club, the Board is very aware of the continuing stress in certain sectors of the shipping market and has therefore set the General Increase for 2016 below the level of claims inflation, at 2.5%.
The Board has decided to lessen the impact of the General Increase decision by declaring a Mutual Premium Discount of 2.5% on the total mutual call for the 2014 policy year. This discount will be applied by way of a credit to the final instalment of the 2014 policy year mutual premium and will amount to a 10% reduction for all mutual Members for that instalment. This is the second such return made in the last four years.