Insurer’s performance strong with underwriting surplus for second consecutive year
Posted on: 15 May 2024
West P&I Club has announced a strong financial performance for the 2023-24 financial year, achieving a 94.5% combined ratio. This is the third year in a row of improvement, a result which represents the Club’s best combined ratio since 2017, and one that is significantly ahead of the recent International Group combined ratio average of 114%.
West reports an underwriting surplus of USD 15 million for the 2023-24 financial year. West’s incurred costs for its own Members’ claims of USD 112 million is on average USD 20 million lower than the 2020–2022 policy years. West’s pool share for the 2023 Policy Year remained low at 6.56% and the cost of claims from other International Group clubs was also relatively benign for the second consecutive year.
Gross earned premiums were USD 326 million for 2023-24, representing an increase of USD 32.4 million from last year. West’s successful renewal in February 2023, which saw the Club’s premium exceed USD 300 million for the first time, underpinned this good performance. High retention rates and continued support from existing Members saw premiums increase across all of the West’s business lines. Each of the Club’s core products – Mutual, Charterers and Fixed cover – all contributed to the positive result.
“When I presented our year-end results 12 months ago, I spoke about West looking forward with confidence, building upon our recent successes, and with the aim for the coming year of further strengthening the Club’s capital. We have exceeded our expectations in this regard with the financial results again showing strong progress against every measure we evaluate ourselves upon,” commented West P&I’s Group CEO, Tom Bowsher.
“Our Fixed, Chartering and Defence products now generate approximately USD 70 million of gross premium per annum. West Hull exceeded our premium targets in its first year and the recent launch of our Piracy Protection product is receiving significant support from our Members and the wider market. Together with West War, and the products and services offered by our partners at Nordic Marine Insurance, Qwest and Astaara, we can cater to all the needs of our Members,” continued Bowsher.
West’s investment portfolio delivered a strong return of 4.6%, generating USD 35 million. This positive investment return, combined with the underwriting surplus, has driven all capital measures in an upwards direction.
The Club’s Free Reserve increased by 20% to USD 276 million, and the solvency coverage increased from 176% to 195%, now comfortably exceeding the Board’s base target level of 175%, and capital as measured under the rating agency models also significantly improved. This re-affirmed AM Best’s decision to award the Club with an A-rating in the Autumn of 2023.
“The Club’s improved capital strength allows us to continue to invest capital in all areas of the Club, further strengthening West’s value proposition to our Members and the wider market. We continue to receive strong support from our existing mutual Members, and we were also delighted to secure a number of new Members to the Club across all regions,” concluded Bowsher – who shared more of his thoughts on West P&I’s 2023-24 financial results in a recent video statement.
