Britannia reports surplus of $37.0m for 2020-21

Britannia P&I Club has posted a net surplus of $37.0m for the policy year to February 20th 2021, with a strong investment return more than counterbalancing a negative underwriting performance.

Calls and premiums were down a fraction year on year to $200.09m, from $210.18m the previous year. Net claims rose to $118.26m, from $111.67m in policy year 2019-20.

Net income after tax fell to $36.97m, from $56.43m the previous year. The net loss ratio rose to 90.8%, from 79.9%. A small rise in the expense ratio to 11.7% meant that the combined ratio increase to 102.5%, from 91.4% in 2019-20.

Investment income fell a small amount, from $58.97m, from $61.87m the previous year.

Free reserves rose to $449.06m, from $422.09m 12 months earlier.

There was a $10.0m capital distribution in October 2020.

Additional assets totalling $177.8m, held by Boudicca Insurance Company Limited are available to Britannia to meet future claims.

Retained claims incurred in the 2020/21 policy year at the 12-month stage were $136.6m, marginally higher than the 2019/20 policy year at the same time.

There were 20 reported claims that were currently expected to cost more than $1.0m with an aggregate estimate of $63.4m. Britannia said that this was at a very similar level to the previous year, which also saw 20 incidents reported, with an aggregate cost of $69.5m.

Claims on the Pool in 2020/21 were significantly higher, with the 12-month figure at a record high of $478.1m, compared to $355.4m in 2019/20.

Three claims notified in the 2020/21 policy year were currently projected to exceed the $10m Club retention

The Club said that there were improvements in earlier policy years, allowing releases of $72.5m from the claims provisions held in respect of those years. This helped to offset the increased provisions required in respect of the 2020/21 Pool position.

Anthony Firmin, Britannia’s Chairman, said that “Despite the challenges of remote working and limited opportunities to meet Members face to face, caused by the Coronavirus pandemic, Britannia has been able to maintain its high standards of service to Members. During this period, the regional hubs have played a vital role in staying in touch with our Members and providing uninterrupted service. Added to this, our recently upgraded IT system has further strengthened Britannia’s robust operating model.

He continued: “Britannia starts the new year with record tonnage after finalising the difficult process of negotiating the renewal remotely. While I welcome our new Members, the club’s growth comes mainly from existing or returning Members. For me, this is the real confirmation that Britannia provides a service which is appreciated and valued by our Members. Britannia’s financial strength is evidenced by the S&P “A” rating with a continuing “stable” outlook and our ability to return excess capital to Members when this is appropriate.”

Britannia now has 247 members insuring 3,912 ships, and owned tonnage of 125.2m gt, plus chartered tonnage of 53.5m gt.

Britannia’s distribution by type is:

Bulk carrier/OBO 35%
Tankers (crude) 18%
Tankers (others) 15%
Containers 26%
General Cargo 5%
Others 1%
  2021 2020
Entered tonnage (owned) 125.2 117.5
Entered tonnage (chartered) 53.5 45.0
  USD(000) USD(000)
Calls and premiums 200,086 201,185
Net claims incurred (118,257) (111,667)
Investment income 58,970 61,868
Net operating expenses (32,520) (31,891)
Net income after taxation 36,967 56,427
Free reserves* 449,055 422,088
Net loss ratio 90.8% 79.9%
Expense ratio 11.7% 11.50%
Standard & poor’s rating A (stable) A (stable)

* Britannia benefits from a reinsurance contract with Boudicca Insurance Company Ltd and in addition to Britannia’s free reserves shown above Boudicca’s surplus assets are available to meet Britannia’s future claims. These were $177.8 m as of February 20th 2021, up from $172.3 m at the end of policy year 2019-20.