Posted on: 15 May 2020
Britannia has released its 2020 Financial Statements, highlighting:
- Satisfactory year with an underwriting surplus of USD29.3m
- Strong investment return (7%) yielding USD61.9m
- Increase in total capital resources net of USD25m capital distribution
- Steady tonnage growth during the year and a strong 2020/21 renewal
- The Association is well placed to meet the financial and operational challenges of the COVID-19 pandemic
Commenting on the results for the year ended 20 February 2020 and the outlook for the current year, the Association’s Chairman, Anthony Firmin, stated: “Britannia continues its mission to be the finest provider of P&I and FD&D insurance and for 2019/20 has achieved another strong set of results. The Association’s robust operating model and financial strength also allows it to support our Members through further investment in service, including IT and our regional hubs. We recognise that since 20 February 2020, COVID-19 has had a material impact on the world economy and the maritime sector. Despite the majority of our staff worldwide currently having to work from home, we are maintaining ‘business as usual’ standards of service and we do not anticipate that the effect of COVID-19 will have a material impact on Britannia’s own claims for the 2020/21 policy year.
Financial overview
After a third consecutive renewal with a zero general increase, total calls and premiums for 2019/20 were down marginally on the prior year. However, lower claims incurred in the financial year resulted in a satisfactory underwriting surplus of USD29.3m and a net loss ratio of 79.9% (2018/19 – 83.8%). The well diversified investment portfolio produced a strong return of 7% overall, with equities being the strongest performer at 16.5%. All asset classes produced a positive result and the overall investment gain was USD61.9m, nearly twice the long-term target.
Capital resources grew by USD31.4m, after taking account of the USD25m capital distribution made to mutual Members in the year and remain above the economic capital target set by the Board.
In the period immediately after the year end, investment markets were impacted by the uncertainty caused by the COVID-19 pandemic and much of the investment gain made during the year was reversed. However, the Association’s strong financial position leaves it well placed to face the challenges posed by the uncertain global economic conditions likely to be experienced in the months and years ahead.
Claims
The aggregate value of retention claims incurred during the 2019/20 policy year was in line with expectations and was USD20m lower than the previous year at the equivalent stage. The number of notified claims was 4% lower than in the previous year. Whilst claims within the International Group Pool were higher than recent policy years reserves held against Britannia’s share of those claims have been set at a level sufficient to absorb any further deterioration.
Chairman’s statement
Commenting on the results for the year ended 20 February 2020 and the outlook for the current year, the Association’s Chairman, Anthony Firmin, stated:
“Britannia continues its mission to be the finest provider of P&I and FD&D insurance and for 2019/20 has achieved another strong set of results. The Association’s robust operating model and financial strength also allows it to support our Members through further investment in service, including IT and our regional hubs. We recognise that since 20 February 2020, COVID-19 has had a material impact on the world economy and the maritime sector. Despite the majority of our staff worldwide currently having to work from home, we are maintaining ‘business as usual’ standards of service and we do not anticipate that the effect of COVID-19 will have a material impact on Britannia’s own claims for the 2020/21 policy year.
Britannia’s Review of the Year – 20 February 2020 is available to download here and on the Association’s website.
