Press release: Financial Strength Maintained Despite a Difficult Year
The Club remains financially strong with free reserves of $505 million even after allowing for the high number of large claims incurred during the 2018 year. Combined with lower investment returns, the Club reported a deficit of $32 million and a combined ratio of 114%.
The frequency of claims in excess of $3 million doubled in 2018 compared to recent years. The cost associated with these additional claims was nearly $40 million which equates to an additional 15% on the combined ratio.
Following the very strong investment performance last year, 2018 proved to be less favourable as the performance of global equity markets reduced the return for the year to 1.4%.
The underwriting result for the year demonstrates the importance of scale and strong capital. The Club remains financially strong with Free Reserves of $505 million and an A (Stable) rating from S&P.
Over the last 8 years Members have benefited from significant premium reductions. Premium rates are at historically low levels and the 114% combined ratio is above the Club’s acceptable range. Although the cost of large claims may be exceptional, it highlights the need for future action on premium rates.
The service and strength of the Club continues to attract new Members. At the last renewal, mutual owned tonnage grew to 144 million gross tonnes, a net increase of 5 million gross tonnes over the course of the year.
The Club has been protecting its Members since 1869 and it will continue to focus on providing excellent cover, service, value for money and financial security. The Club places significant importance on its loss prevention and safety initiatives which are not only beneficial to its Members’ operations but also work to protect the lives of thousands of sea-farers and passengers worldwide.
This year, the Club launched a series of videos tracking events in the build up to an incident leading to a claim. These videos supplement the existing “lesson learnt” publications and are available to all on the Club’s website.
The Club’s 150th anniversary competition challenged those at the start of their maritime career, both at sea and on shore, to develop innovative, industry-changing ideas with a focus on improving safety at sea.
The Club is also pleased to support a number of important charities including The Mission to Seafarers, Mercy Ships and Ocean Sole.
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UK P&I Club has completed the redemption of its 10 year $100m hybrid bond with effect 22 August 2018