The
London Club has announced a general increase of 15 per cent in its
advance call for the 2004/2005 policy year. Meanwhile, the Club has also
confirmed that supplementary calls for all open underwriting years remain
unchanged.
The move to raise rates follows on from an increase in free reserves to USD
82.7m at the end of the 2002/2003 financial year. Paul Hinton, Chief
Executive of the Club's managers, A Bilbrorough & Co, emphasised that the
increase is a precautionary measure to ensure the continued financial
security of the Club. "Despite the modest increase in the Club's reserves
which has been achieved, it is important to reduce the risk of erosion in
the future," he said. "Various claims forecasts were considered, and
together with the uncertainty of future investment returns, this has
resulted in the committee authorising a general increase in the advance
call."
Any increase in the cost of the Club's share of the International Group's
excess loss reinsurance programme, which has not yet been determined, will
also apply.
The advance calls will now be paid in two instalments. The advance
supplementary call, payable in October, will now be known as the "deferred
call". This more clearly shows that the call is a part of the estimated
total call, as budgeted at the beginning of the year.