London Club “disappointed” by revised S&P outlook

The London P&I Club has expressed its disappointment that Standard & Poor’s has revised its outlook on London P&I Club to negative from stable.

In December 2018 S&P rated the Club at BBB with a stable outlook, and affirmed this at the start of June following a review of London Club’s 2018/19 operating results. Subsequently, S&P published a new Insurance Rating Methodology (IRM) which revises the way it rates insurance organisations. The application of the new IRM meant that London Club maintained a rating of BBB but now attaches a negative outlook.

Ian Gooch, CEO of the club’s managers A Bilbrough & Co Ltd said that “naturally we are disappointed with the revised rating which, we understand, is mainly attributable to our 2018/19 financial results. However, our capital position remains strong, with year-end free reserves of $168.8m. Our balance sheet is robust on an absolute and historical basis and compares favourably with other IG clubs. Additionally, our Solvency Financial Condition Report confirms we retain a healthy solvency ratio.”

Gooch noted that London Club had enjoyed a “stable outlook” for many years and so it had questioned S&P over the application and process of its new methodology. “We believe there are a number of questions that require clarification and, as club managers, we will continue to engage them with a view to restoring our previous rating” he said.