London P&I Club has said that its retained claims experience in the first half of the year was in line with expectations, while there was an increase in the cost of claims on the pooling system from the low level experienced at the equivalent point in 2016.
During the same period, the Club’s owned mutual entry grew by 1.6m gt, drawn from existing Members and 15 new fleets. The Club’s fixed premium facilities for charterers and for the owners of smaller ships had made “steady progress”. Churn effect continued to put premium levels under pressure, the club said, although to a lesser extent than in recent prior policy years.
On the investment side, the Club produced a positive return, ahead of expectations, with an allocation of 66% fixed income, 24% equities and 10% cash.
For the 2018/19 Renewal the Board decided that no general increase in Annual Call rates would be set. However, during the renewal process there would be further attention paid by London Club underwriters to the adjustments required to individual Member rates in order to achieve an equitable level of premium income over the medium term, reflective of their record and/or exposure to risk.
For the coming policy year there would be a $1,000 increase to deductibles, with an increase of $2,000 to apply to those involving crew and other persons.
The Club said that it believed Members and brokers valued its specialized approach, including the closeness and continuity of the working relationships that it strove to provide.
The Club noted that its focus on P&I and similar lines of business and the allowance for a part to be played by investment performance did not sit readily with rating agency models. “But the adoption of rating-friendly measures is not the Club’s objective – our aim is to support and protect Members”, the Club said.
London Club said that its sub-100% combined ratios in the 2015/16 and 2016/17 financial years were lower than targeted. They were supported by a particularly favourable claims experience. The Club said that there were signs that adjustments to its mutual underwriting strategy, together with increased attention to Member terms and deductibles, as well as the progress being made by other affiliated lines of business were bearing fruit. “Our objective remains to produce balanced underwriting results over the medium term, while allowing for a reasonable contribution from investments”, the club concluded.