North P&I Club results improve after parting company with some members
North P&I Club, a mutual marine liability insurer, has reported a low year for claims, which has helped it increase its free reserves by $90 million to $428 million in the financial year ended 20 February 2016.
The company reported a combined ratio of 73.3 percent for the year, which brings its combined ratio average of the past five years down to 95.7 percent.
Its results are improvement on last year’s, when the firm experienced a large number of high-value claims and a pension deficit charge. Despite these losses, the Club still posted a healthy 8 percent growth in free reserves, which stood at $338.1 million.
Alan Wilson, joint managing director, said its improved performance was as a result of the Club’s decision to part company with members not willing to make an equitable contribution; a historically low number of claims in excess of $1 million; low attritional claims numbers; an improvement in the deficits of the North Group’s pension schemes and the successful integration of Sunderland Marine within the group.
Paul Jennings, joint managing director, added: “2015 was a very unusual year for claims, very similar to the exceptional year we enjoyed in 2010, but with the much larger membership. We believe that a combination of good fortune, careful member selection, a rigorous industry leading loss prevention programme, a reinvigorated approach to claims management and decreased/less intensive vessel trading activities all had a role to play in reducing the value of our gross claims by 18 percent on the previous year.
“Despite the fact that the total number of vessels entered into the Club has increased over the past five years, we had just 19 claims in excess of $1 million (totalling $55 million) – just over a third of the equivalent number in the previous year, and over 1,000 fewer small claims below $1 million.”
Jennings continued: “This pattern seems to have been reflected across the International Group as only nine Pool claims were notified in the 2015 year. In our case, the benefits from investing in our people are coming to fruition through more effective claims handling, which contributes to this strong financial result.”
