Thomas Miller books £15.7m gain in 2020

Thomas Miller, a provider of insurance and professional services, reported a profit of £15.7m for 2020 at its AGM at the end of June. This compared with a gain of £22.95m the previous year. Turnover rose to £155.4m, from £149.6m in 2019.

CEO Bruce Kesterton noted that across Thomas Miller’s core mutual engine it had seen a “very strong performance”. with the benefits of new fee agreements concluded with most of the Clubs.

A new fee was agreed with UK War Risks in January 2021 and Kesterton said that Thomas Miller was working to reach an agreement shortly with Hellenic War Risks.

The strong performance by the mutuals had been driven by the transport Clubs, notably TT Club, which in 2020 turned in one of its strongest performances in recent years. The Club booked an 85.2% Combined Ratio and a 3% investment return. In consequence, the financial surplus-driven management fee delivered a record £8m profit.

Thomas Miller’s management of the UK P&I Club saw profits grow slightly on 2019, “reflecting the incentive fee award and good cost control”.

The ITIC board has nominated Tom Irving as successor to Stuart Munro as the Club Manager and Club CEO later this year.

Kesterton noted that Munro’s tenure had seen ITIC grow very successfully, while generating increasing financial surpluses (returned via the Club’s Continuity Credit programme).

Profits at the PI Division dipped slightly during 2020, but Kesterton said that this still represented “reliable and steady cash generation, especially when factoring in the loss of SIMIA and the decline of HAMIA”. He said that new ventures in the PI Division should offset these losses in future years, including the establishment of PAMIA in Canada in 2022.

In the Specialty Division, which has seen the existing activities in Specialty Marine and Offshore being joined by BLP – now renamed TMS Construction – , TheJudge, Captives and OPDU, the Division overall improved its financial performance, benefiting from a full year’s contribution from TheJudge.

TheJudge generated a £2.8 million profit in 2020, described by Kesterton as “a commendable performance considering the significant disruption to the legal system imposed by Covid-19, and in line with the forecasts that backed our share purchase at the end of 2019”.

In the previous year there was a £3.3 million remeasurement gain associated with the revaluation of our stake, following our purchase of the remaining 76% Thomas MIller did not own.

Within the overall Specialty Division results, Kesterton said that it was encouraging that the core Marine and Offshore business had moved into profit. In particular, the Offshore business had seen a strong increase in GWP. “The Offshore team has built its premium base remarkably well since the team was brought on board in 2016”, he said.

He noted that parting company with BLP’s carrier entailed a restructure of the organization and a write-down on some of the software costs associated with products related to the previous carrier. A new carrier for TMS Construction was in the process of appointment as he was writing his report. The previous business is in run-off.

The German Marine Specialty operations recorded losses on the year due to re-underwriting the book and a need to restructure the business’ cost base.

The Professional Services Division incurred a worse than forecast performance, recording a loss of £1.3m, compared to a £200,000 loss in 2019. Kesterton said that Brookes Bell was the business most affected by Covid-19, as travel restrictions had severely reduced the team’s ability to undertake their work. “Performance picked up in late 2020 but could not recover the losses seen earlier in the year”, he said.

He added that Miller had seen high levels of business in the first part of 2021 for the Brookes Bell offices in locations emerging first from pandemic restrictions, such as Shanghai.

Thomas Miller Claims Management was reported to have delivered “an encouraging profit on strong revenues”. Kesterton said that the claims business had seen cruise line income hold up better than expected, with a steady flow of Covid-19 PCR tests arranged for cruise and offshore firms supporting its income streams. Law income had been improved through attracting new clients as well as referrals through other Thomas Miller entities.

The just-held AGM was Hugo Wynn-Williams’ last as Chairman as he handed over to Charles Fenton, who will continue as CEO of the Thomas Miller-managed TT club. Wynn-Williams will retain a consultancy role as President of Thomas Miller, supporting a number of the shipping mutuals and the Specialty and Professional services divisions. He also continues as CEO of the UK Club’s Netherlands subsidiary which provides Brexit solutions for the Club and a number of other Thomas Miller-managed businesses.–accounts–2020.pdf