London P&I Club reports increased free reserves for 2017/2018

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The London P&I Club has issued an advance summary of its result for the 2017/2018 financial year, ahead of the publication of its annual report. The club recorded an overall surplus after tax of $6.6m, increasing the free reserve to $194.6m. The combined ratio was 118.7%. In the year to 20th February 2018, there was an investment return on the club’s portfolio of 5.5%, or $18.9m, net of associated management expenses.

The club continues to receive additional entries from new as well as existing members and, following the February 2018 renewal, there was a year-on-year increase of 5.8% in its mutual membership. In addition, there was further volume growth in the club’s bespoke covers for charterers and for the owners of smaller vessels.

Ian Gooch (pictured), CEO of the club’s management team, said: “The continued strengthening of the free reserve was pleasing and the growth in the membership was also encouraging. At the same time, though, the 2017/2018 result reflected a $14.4m rise in the cost of the club’s net incurred claims, the drivers of which included an increase in claims activity involving the International Group Pool as well as an increase in the cost of higher-severity Fixed and Floating Object claims within the club’s retained layer. The claims outturn coincided with a period of continued pressure on P&I premium levels and the combination of these factors contributed to an increase in the combined ratio.”