For its 2024-25 renewals West P&I Club noted that its own claims for the 2023/24 Policy Year had been better than forecast, and that claims development on prior years also showed general improvement.
The Club said that, as expected, claims experience on the International Group Pool had increased from last year’s low level of activity, with seven reported claims in the current Policy Year, together with some adverse development on back year Pool claims notified by other Clubs.
West said that its combined ratio was forecast to be around 100% at year end. The Free Reserve was forecast to increase to around $241m, with investment returns, although positive, being constrained by the continued rise of interest rates globally.
Capital was expected to increase further at February 2024, to a Solvency Ratio of around 180%.
The annualized mutual entry at year end was expected to be 100m GT, with an annualized gross premium of around $250m.
West’s board said that, despite the Club’s overall strong performance, premium levels remained insufficient to meet expected future claims costs. It there decided “in order to ensure that the Club meets its long-term objective of breakeven underwriting”, that:
For Class 1 (P&I) entries a 7.5% standard surcharge has been set to apply to all mutual premium rates. To reflect claims inflation, an increase of 10% will be applied to all deductibles below $50,000.
Members with adverse records would experience “additional action”.
A Release Call of 15% has been set for the 2024/25 Policy Year.
In Class 2, the Club said that inflation in legal fees had continued to impact FD&D claims.
For Class 2 (FD&D) entries a 5% standard surcharge has been set to apply to all mutual premium rates. No change will be made to the deductible structure in Class 2.
A release call of 15% has been set.