February 20, 2014 not only marked the end of The Standard Club’s financial year, but also revealed evident improvement. The club’s combined ratio strengthened to 101%, from 113% in 2013. Gross premium income net of reinsurance increased by $22m to $253m, whilst claims net of reinsurance and operating expenses came to $257 million, a fall of $14m. This produced an underwriting deficit of $4m (a 101% combined ratio), which was covered by an investment surplus of $10m. With free reserves of $369m, and the amount set aside to meet outstanding claims and IBNR at $580m, the reserves available to meet claims stands at $949m.
In recent years, the club made the decision to use its financial strength to support members during difficult times in the shipping industry. Despite having held back from increasing premium rates at the same pace as its competitors, the club was able to record an improved underwriting result compared to the previous year.
During the year, the club’s investment portfolio was defensive, resulting in a below benchmark investment return. The Standard Club said it has benefited from four years of outstanding investment performance relative to its peers, and its investment returns over previous years have been the best of any P&I Club. Reflecting the club’s strong balance sheet, Standard & Poor’s have assigned the club an ‘A’ rating.
Jeremy Grose, Chief Executive Officer, said, “The club has achieved a satisfactory and stable result for the year. We have delivered a surplus and achieved a near break-even underwriting performance. The combined ratio has improved substantially, to 101%, which is the clearest sign of our consistent underwriting discipline. The club remains amongst the strongest financially in the International Group with an S&P ‘A’ rating.Our members are at the heart of everything we do. Over the last year we have continued to focus on providing first class service and building the strength of the club for the future.”