North P&I Club Annual Report
North P&I Club Reports a 'Stable and Positive' Result in a challenging Market.
The ‘A’ rated, 170 million GT North of England P&I club has achieved a ‘stable and positive’ result for the 2011/12 financial year despite challenging market conditions, according to chairman Pratap Shirke of Australian ship management group ASP. The club’s Management Report 2012 has just been published.
Shirke confirms, ‘Against a background of difficult shipping market conditions, a volatile investment landscape and a trend of increasing claims, we are pleased to report a stable and positive result.’ North marginally raised its free reserve to a new high of US$314.0 million at the annual renewal on 20 February 2012, with premium income reaching US$348.3 million and net assets rising to US$896.2 million.
Joint managing director Paul Jennings says, ‘We are able to report another successful 12 months for North, with further steady and controlled growth worldwide. Owned and chartered tonnage reached 123 million GT and 40 million GT respectively at renewal and have since grown to 125 million GT and 45 million GT, resulting in global market share of around 13%.’
Joint managing director Alan Wilson says, ‘North remains financially robust despite the current global economic uncertainty. Our underwriting result was very close to breakeven in 2011/12, producing a combined ratio of 101.8%. Together with a return of 2.76% on our low-risk investment portfolio, this produced an overall surplus for the year of US$1.6 million.
‘In January 2012 we also retained our Standard and Poor’s ‘A’ stable financial strength rating for the eighth consecutive year; we are now in our 21st year of not calling on members for unbudgeted supplementary funding; and our capital adequacy looks set to be comfortably in excess of the anticipated January 2014 requirements of EU Solvency II,’ says Wilson.
Jennings says other positive events for North in 2011/12 included moving into its enhanced and extended headquarters in Newcastle, UK; opening a branch office in Japan; recruiting 14 new staff; and entering into a strategic reinsurance alliance with Sunderland Marine Mutual Insurance Company Limited (SMMI).
Looking to the future, Shirke says diversification will remain a significant feature of the club’s overall strategic direction. ‘Although we are firmly committed to providing our core mutual products of P&I, FD&D and war risks cover, we will continue to explore opportunities to expand and diversify.’