The Britannia Steam Ship Insurance Association Ltd
Managers – Tindall Riley (Britannia) Ltd
Standard & Poor’s Rating confirmed at A (stable) last week
Tonnage By Vessel Type
Tonnage By Area
Results since 2016 policy year
|Net Claims (incurred)||189,832||164,941||144,828||114,789||192,276|
|Net Underwriting Result||(53,691)||(21,608)||7,146||45,848||(2,403)|
|Gross Outstanding Claims||1,198,743||1,163,551||1,142,577||1,173,878||1,308,955|
|Average Expense Ratio||11.50%||10.90%||9.73%||9.42%||9.12%|
All figures for Britannia have been restated to include those of Boudicca.
All figures $’000
Tysers said that, despite a combined ratio of 132%, which was the second-worst in the IG after the London Club, the Club still managed a surplus of $32m, with an investment return of $87m more than compensating the underwriting loss of $54m and enabling the Club to make a total capital distribution of $25m to members so the final net surplus was $7m.
The broker observed that over the past four years the Club had returned $85m to members on a non-policy year basis. Last year gross premium reduced by $3m to $201m, while net claims were up $25m at $190m. For the 2019 policy year the Club suffered 20 claims in excess of $1m and these totalled $70m, with three claims hitting the Pool. However, overall, the net retained claims position for the policy year was some $20m better than for 2018.
Owned tonnage rose by more than 5m gt to 118m gt; chartered tonnage saw a greater rise, from 19m gt to 45m gt, pushing overall tonnage to a record high.
Tysers said that it was remarkable that the Club ended the year, on a consolidated basis, as financially strong as ever, “despite the awful combined ratio”.
Tysers had one negative comment:
“In order to make a fair comparison with the other Clubs, we do look at the Club and Boudicca on an overall basis. We appreciate that the Club cannot issue consolidated accounts but we do feel its Review of the Year issued in advance of the Annual Report is misleading in summarizing the Club’s performance (excluding Boudicca) by including investment income of $62m to improve the Club’s “net loss ratio” to 79.9%”. Tysers requested that Britannia adopt the market practice of separating the technical result from the investment performance.
Meanwhile, last week Standard & Poor’s confirmed Britannia’s ‘A’ rating with a stable outlook.
S&P added that Britannia’s outlook remained stable over the next two years, based on its view that the Club’s current capital buffer well exceeded S&P’s ‘AAA’ level requirement. S&P noted the difficult trading conditions experienced in 2020/21, with significant earnings volatility. The agency also recognized that Britannia had a “large capital cushion” available’. It expected the Association to return to profitable underwriting and investment performance in 2021/22.
S&P said that Britannia “benefited from well-articulated conservative risk tolerances across the organization, the expertise of the experienced and long-standing management team, and good knowledge transfer across the organization.”