UK P&I Club financial highlights


At the UK P&I Club’s Directors’ meeting in Athens on 17th October, 2011 it was agreed that the premium rating of all Members will be increased by three per cent from 20th February 2012.


This decision was taken in response to continuing underlying claims inf lation. The 2011 policy year has started well with low claims frequency, however, although the frequency of claims has reduced significantly in 2009, 2010 and 2011, the average cost per claim has continued to increase over this period. The Board was determined to strike a balance between ensuring the Club’s premium does not fall behind claims inf lation while at the same time doing all it could to limit the impact of the increase on the Members. Although we have been fortunate to enjoy lower claims numbers there is still an average inf lation on P&I claims of around 5 per cent per annum.


The UK Club’s total assets now stand at in excess of $1.6 billion. Free reserves and hybrid capital have been built up to $486 million, an $8 million improvement on the position since 20th February, 2011 ($478 million) equivalent to $4.5 per ton. The Club’s capital adequacy as measured by S&P’s capital model is now in the AAA range. This further increase in the Club’s capital base has been achieved whilst maintaining a consistent and prudent approach to claims reserving. Investment return for the half year to 20th August was $14.5 million, equivalent to a 1.8 per cent return. The Club reduced portfolio risk in September, 2011 by reducing equities to 9 per cent of the portfolio and increasing fixed interest holdings to 72 per cent. Ninety-nine per cent of all bonds invested in by the Club are A grade or better. The Club is expecting to see its combined ratio below 100 per cent for the current year.


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Hellas HiLights November 2011


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