UK Club Spring Update: 2020
UK Club Reports Strong Financial Position
The Club's financial position remains strong as free reserves grew by $54 million to $559 million as at 20 February 2020. This was driven by an exceptional investment return of 9.6% for the year. The Club continues to meet all of its regulatory capital requirements and Standard & Poor's reaffirmed the Club's A (Stable) rating in December 2019.
The Club benefitted from reasonably good large claims experience on its own account for the 2019/20 policy year. However, other clubs' Pool claims were higher than usual.
While the recent renewal was firmer than recent years, further movement is needed to bring premiums in line with risk.
This is important to maintaining a healthy and robust P&I sector, particularly in these challenging times. Members have benefitted from reduced premium rates in recent years, supported by the strength of the Club's financial position. However, the Club's combined ratio of 120% shows that premium rates have fallen below the level necessary to cover claims and expenses. The recent renewal was firmer and the Club has emerged stronger through careful selection of
risk. Mutual tonnage remained stable at 142 million GT with significant additional Chartered tonnage.