Standard Club expects “small reduction” in free reserves this year

Standard Club has said that the club’s finances were strong, with the current forecast being for a small reduction in free reserves at the end of the financial year. There will be no general increase for the 2019 policy year, but deductibles will rise.

An underwriting deficit was expected on the most recent policy year and a small investment loss was anticipated. The club’s free reserves remained well in excess of regulatory and rating agency requirements.

In the P&I class, after two relatively benign years, the current policy year had seen claims return to previous levels. Premium levels had reduced over recent years, and there was consequently expected to be a loss on this policy year. The underwriting result for the financial year was expected to be close to breakeven as improvements across prior years had offset the current policy year deficit.

No call in addition to the Estimated Total Premium (ETP) was expected.

Release call percentages are to be maintained at the levels set at the May board meeting: nil for the policy years 2016/17 and 2017/18 and 6% for the current policy year.

The 2016/17 policy year is expected to be closed in May 2019.

The club said that its release call percentages remained “amongst the lowest in the International Group, reflecting the club’s continuing strong financial position.”

The Defence class was performing satisfactorily. No call in addition to the ETP was expected. The release call margins and expected closure date for 2016/17 would be as for the P&I class.

No general increase will be applied to members’ premiums this year.

As is the case for all clubs, managers will engage with those members whose claims and exposure are out of line with their premiums to discuss the terms of their renewal individually. These members should expect to incur premium increases and changes in terms which more accurately reflect their individual record and exposure.

The club said that it remained open to members bearing a greater share of the risk by way of increases in deductibles to mitigate the necessary premium increases.

Any change in the International Group’s reinsurance costs will be reflected in members’ premium.

The Club said that the general level of deductibles was too low so the board has decided that there should be a 10% increase in all deductibles, with existing deductibles below $20,000 increased by $2,000.

No general increase will apply to the Defence Class.

Meanwhile, as previously advised, in response to the UK’s decision to exit the EU the club has applied to the Central Bank of Ireland for approval to set up a new subsidiary, The Standard Club Ireland DAC.

Members of the European Division and European members of the Offshore Division will be affected by these changes at renewal and the managers will provide more information to affected members in due course.

Finally, the managers Charles Taylor said that they were aware of a fraudulent circular in circulation, dated October 11th 2018, advising members of a temporary change of banking details supposedly because of Brexit. It said that the club has not issued such a circular. The managers strongly recommended that members seek verbal confirmation from their usual club contact of any changes in banking details before making any payment.