2016 has been another strong year for the Club. Despite a small number of large claims notified to the Club towards the end of the year, a decent underwriting result and strong performance within the investment markets have enabled the Club to record a surplus for the ninth year in a row.
The combined ratios for the financial year of 104% (when currency gains are excluded) or 100% (including the currency gains) are within the Club's acceptable target range and demonstrate the Club's resilience to such claims.
Disciplined underwriting, which encompasses the quality and safety of ships entered and the appropriate rating of risk, remains a key element of the Club's strategy. The Club's target is to provide insurance at cost and the average combined ratio over the last seven financial years of 100% demonstrates that this target has been met consistently.
The Club's strategy is also to manage the Club's capital needs as efficiently as possible. Achieving this efficiency enables the Club to hold less of the Members' money in reserve. The Club has therefore sought to give money back to Members where possible. Capital efficiency and consistent underwriting performance enabled the Board to discount the 2015 policy year mutual premium by 3%. This was the third time that the Club has been able to return money over five years and brings the total amount returned to over $25 million.
At 20 February 2017, the Club held free reserves of $458.4 million with a further $99.4 million held in hybrid capital.
2017 was a good year for the Club. The underwriting surplus of $29 million was the largest in recent years. This, when coupled with a strong investment return of over $43 million, delivered a total surplus of $72 million. After adjusting for forward currency contracts, the Free Reserves at 20 February 2018 increased by $82 million to $540 million.
The UK P&I Club ("The UK Club"), one of the leading shipping protection and indemnity mutual insurers, announces its financial results for the year ended 20 February 2016.
The Club emerges from the renewal to start the new policy year with total mutual owned tonnage of 139 million gt, slightly higher than at the start of the previous policy year. Combined mutual-owned and chartered tonnage now stands at around 239 million gross tonnes.
