Tysers 2020 Marine Liability Report – The Clubs: #6, North (#results) The North Of England P&I Association Ltd

Standard & Poor’s Rating   ‘A’

Tysers felt itfair to say that 2019/20 was a bad year for North”. The broker cited two high-profile casualties, the sinking of Grande America and the capsize and wreck removal of Golden Ray.

As Tyser observed, North has referred to the latter as one of the largest ever P&I claims. It is expected to cost more than $400m (and therefore still dwarfed by a factor of more than three by the Costa Concordia disaster in 2012). In the Club’s defence, Tysers said that such serious casualties were random in nature and could hit any Club. “However, when you are as big as North, with a not-so-good record in the Pool, which has suffered a substantial increase in claims over the last two years, and with the Pool arrangements now also requiring the Club suffering the loss to pay an additional $3.5m in the layer $50m-$100m, these casualties can impact substantially on a Club’s bottom line”, said Tysers.

The combined ratio deteriorated to 125.8%, from 105.1% the previous year, producing an underwriting loss of $68m. This was nearly covered by a 6.37% investment return, which amounted to $64m.

An additional pension deficit, which has been a thorn in North’s side, led free reserves to fall by $19m to $444m.

Total gross premium was virtually unchanged at $346m, but net claims rose by $47m to $274m.

Owned tonnage grew by 13m gt to 160m gt, with chartered tonnage is up by 10m gt to 70m gt.

North said that the worrying result of this was that free reserves per owned gt were now down to $2.77, one of the lowest ratios in the International Group.

Tysers said that it would be no surprise if North sought a general increase at the top end of the scale for 2021.

Tysers said that on a more positive note the integration process of Sunderland Marine – which writes Hull and P&I for small vessels, and aquaculture – was completed in 2020 with the formal transfer of the business to North, and the Club had very recently established a Hull facility for blue water tonnage.

Gross Tonnage

Owned 160,000,000
Chartered 70,000,000

Free reserves

2020 443,810,000
2019 463,037,000
2018 450,462,000
2017 430,755,000
2016 428,109,000

Tonnage By Vessel Type

Bulkers 39%
Tankers 26%
Containers 23%
Other 12%

Tonnage By Area

Europe 41%
Asia-Pacific 35%
Scandinavia 11%
Middle East 7%
Americas 6%

Results

Year 2020 2019 2018 2017 2016
Calls/Premium 346,567 345,019 387,599 428,348 489,810
Reinsurance Cost 65,512 61,701 81,326 98,389 128,757
Net Claims (incurred) 274,490 227,138 243,944 246,013 196,040
Operating Expenses 74,715 68,868 77,410 75,698 77,579
Net Underwriting Result (68,150) (12,688) (15,081) 8,248 87,434
Gross Outstanding Claims 1,256,282 836,932 826,053 865,610 869,420
Total Assets 1,873,184 1,429,786 1,413,731 1,494,210 1,490,314
Average Expense Ratio 13.70% 12.70% 12.10% 12.00% 12.40%
Solvency Margin 1.49 1.71 1.71 1.73 1.71
Reserves/GT Ratio $2.77 $3.15 $3.17 $3.08 $3.27

All figures $’000

Figures include Sunderland Marine