Shipowners’ Club downgraded as P&I hits troubled waters

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Despite its reputation as one of the UK’s financially stronger P&I Clubs, Standard & Poor has been forced to significantly downgrade the Shipowner’s Club’s financial strength rating, according to Nick Riddle, Executive Director of HSBC’s Global Marine Practice division.

Hit hard by the negative factors affecting the P&I insurance sector, the club has revealed a visible reduction in its free reserve, with a further anticipated reduction due to negative investment returns and weakening operating performance demonstrated by two years of underwriting losses.

Closely following the UK Club in its downgrade, and with a number of other clubs currently under review with imminent assessments expected, it is becoming clear that P&I insurance is suffering severely as a result of widespread economic difficulties and rising risks and threats to marine insurance cover.

In response to the downgrading, the club has confirmed that free reserves have reduced during this year to date, but has stressed that these are unrealised losses and it has not had to dispose of any investment assets at a loss.