London Club will not be applying a general increase, but will be targeting a 7.5% increase in average rates for the 2024/25 renewals, which come into effect on February 21st 2024.
The Club said that its income and tonnage growth in 2023/24 to date had been in line with projections. A continuing upward trend in revenues, allied to a favourable higher severity claims experience, produced a better than expected combined ratio of below 100% at the six month stage of the financial year.
The claims experience remained favourable at eight months. Further rises in interest rates had continued to exert downward pressure on fixed income capital values, largely offsetting the income receipts during the period and leading to a breakeven year-to-date investment result.
Prior year reserve movements had stabilized, following higher than expected post-expiry deterioration in the 2022/23 financial year, which the Club said was principally attributable to Pool claims.
London Club said that it was adopting a cautious approach, recognizing the effect of persistent inflationary pressures on claims and operating costs, uncertainty as to the future direction and level of interest rates, and the prospective impact of a small number of higher severity claims.
The Release Call rate for the 2024/25 policy year has been set at 15% of the Annual Call.
For FD&D, income for the current policy year had been slightly ahead of projections. Although claims costs were in line with expectations so far, the Club noted that FD&D risks were by their very nature long tail, and were also subject to inflationary pressures.
As with the P&I Class, an overall increase of 7.5% in average rates is being targeted, but without a general increase. The Release Call rate for the 2024/25 policy year is set at 15% of the Annual Call.
Release Calls:
Class 5 (P&I)
- 2021/22: 5.0% of the Annual Call
- 2022/23: 15.0% of the Annual Call
- 2023/24: 15.0% of the Annual Call
Class 8 (FD&D)
- 2021/22: 5.0% of the Annual Call
- 2022/23: 15.0% of the Annual Call
- 2023/24: 15.0% of the Annual Call