West P&I has achieved a 96.7% combined ratio in the 2022-23 financial year amid challenging global economic circumstances, representing the strongest result for the Club since 2017.
West also reports an underwriting surplus of US$8 million and gross earned premiums of $293.2 million for 2022-23. Its latest combined ratio has improved materially from the previous financial year.
The Club attributes its improved operating performance to a successful renewal in February 2022, which saw rating levels increase and also a drop in Covid-related claims meaning that its Members’ own claims were better than forecast. The lower cost of International Group Pool claims during 2022 was also a significant contributor to West’s strong performance, as well as the Club’s own record on the Pool improving considerably too.
“West began 2022 in a much stronger position than recent years following a successful renewal, which saw the Club’s rating levels increase and its risk profile improve,” said Tom Bowsher (pictured), Group CEO of West P&I.
Mr Bowsher added that the decline in Covid-related claims bolstered Members’ own claims performance in 2022, despite inflationary pressures throughout the year. Members’ back-year claims developed more favourably than expected.
Elsewhere, the IG was notified of just five claims, none of which came from West. “This has a positive impact on our Pool share and the incurred cost of Pool claims to West was much lower than in recent years,” Mr Bowsher said.
Inflation and interest rate rises hit investment markets in the 2022-23 financial year, contributing to West’s losses for fixed income investments and affecting its equity holdings. The Club’s alternative asset portfolios generated a positive income, however, resulting in its overall investment portfolio producing a -3.6% return.
The Club’s Free Reserve reduced to $230.8 million but its overall capital position improved with the solvency coverage increasing to 176%.