TIDM51EN
RNS Number : 6967U
United Kingdom Mutual Steam Ship As
20 October 2010
PRESS INFORMATION
20th October 2010
UK P&I Club announces five per cent general increase for
2011
Key financial indicators
-- General increase for 2011 set at five per cent
-- Free reserves and capital increased to $419 million at 20th
August 2010
-- Improving overall claims position, particularly on 2009 and
2008 policy years
-- Claims reserve release of $34 million at half year, whilst
maintaining the same level of reserving confidence
-- Current investment income in line with forecast annual return
of four per cent
-- Combined ratio for 2009 policy year of 102 per cent
-- S&P rating: A- (stable outlook)
2011 general increase
The premium rating of all UK P&I Club Members will be
increased by five per cent from 20th February 2011. This was agreed
by the UK Club's Directors at their meeting in Shanghai on 18th
October.
The decision was taken in the light of the underlying
inflationary increases in claims. Much of the recent improved
claims performance has come from lower claims numbers not lower
claims values. The average cost per claim has continued to increase
over this period. Past experience of claims and shipping cycles
shows that claims escalate much faster than retail inflation when
the world economy begins to recover.
Free reserves and capital
At the beginning of October, the UK Club's total capital stood
at $419 million, a $10 million improvement on the position since
20th February 2010. This increase in the Club's capital base is
encouraging and has been achieved whilst maintaining a consistent
and prudent approach to claims reserving.
Investment performance & policy
Investment return for the half year to 20th August was $17
million, equivalent to a 1.6 per cent return and in line with the
forecast annual return of four per cent. Since the half year
markets have been very buoyant in September and early October
enhancing this return significantly.
The present distribution of assets is approximately 77 per cent
in cash and fixed interest, 15 per cent in equities and 8 per cent
in absolute return funds.
Combined ratio
The Club's combined ratios for the 2008 and 2009 policy years
were 105 per cent and 102 per cent respectively.
Standard & Poor's
The Club's current Standard & Poor's rating is A- (Stable
Outlook).
Looking forward
Chairman Dino Caroussis has been encouraged by a "continuing
improvement to our restored financial position" over the first six
months of the financial year 2010/11, boosted by improvements in
the claims on the 2008 and 2009 policy years, in particular.
"This has provided us with a welcome addition to our capital and
enabled us to make releases from our reserves.
"It is too early to be confident about the 2010 outcome but
experience to date has been similar to 2009. Nevertheless, we must
make sure we have adequate reserves if claims obligations turn out
to be greater than anticipated.
"Looking ahead, the broad claims picture is one of lower numbers
not lower values with average claims costs continuing to increase,"
continued Mr. Caroussis. "The modest five per cent figure allows
for the effects of claims inflation. However, claims may increase
more rapidly if market conditions improve further.
"The new Solvency 2 regime in Europe will require the Club to
maintain a stronger capital position than the current regulatory
regime requires. It involves more than just capital requirements
since it focuses on the entire risk management of the organisation,
including governance arrangements. Directors and managers have
worked very closely together in addressing what needs to be done
and have made very satisfactory progress."
For further information:
The Club provides a detailed explanation of claims performance
in its October 2010 Review, published this week. Copies can be
downloaded from the UK Club website www.ukpandi.com or obtained
from the press contacts listed below.
Thomas Miller P&I Ltd
Hugo Wynn-Williams/Nick Whitear Tel: +44 (0) 20 7283 4646
Smithfield Consultants Ltd - (Financial Press Enquiries)
John Kiely / Will Swan
Tel: +44 (0) 207 360 4900
Dunelm Public Relations - (Trade Press Enquiries)
Martin Rowland Tel: +44 (0) 20 7345 5232
Notes to editors
UK P&I Club
The United Kingdom Mutual Steam Ship Assurance Association
(Bermuda) Limited is generally known as the UK P&I Club. As a
mutual association, the UK P&I Club has no outside shareholders
and no financial links with other organisations. Since its
establishment in 1869, the Club exists solely for the benefit of
its Members. Its structure enables it to be uniquely responsive to
the changing needs of its assureds and allows it to provide
superior service, attention and coverage to those Members.
Overall control of the UK Club lies with the Directors, who are
elected by the Members from among themselves. They meet four times
a year usually to formulate policy on calls, the scope of cover,
finance, underwriting and claims matters, reinsurance and current
industry issues affecting the P&I world. They resolve specific
claims which may not fall clearly within the cover. In 350 ports
around the world, on-the-spot help and local expertise is always
available to Members and to the masters of their ships, from the
Club's 460 correspondents. The network includes offices of the
managers Thomas Miller in London, New Jersey, Hong Kong, San
Francisco, Piraeus, Tokyo, Beijing, Shanghai and Singapore.
Thomas Miller
The Thomas Miller Group manages a number of world-leading mutual
insurance organisations (clubs) providing insurance for shipping,
transport and professional indemnity risks.
Thomas Miller manages captive insurance companies in the Isle of
Man and Bermuda; provides risk management consultancy services;
and, through its regulated specialist subsidiaries, delivers a full
investment management service to mutual clubs, captives and other
clients.
Previously a group of partnerships, the firm incorporated in
1999, and is now owned and controlled by its 550 employees
worldwide.
This information is provided by RNS
The company news service from the London Stock Exchange
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