Protection and indemnity mutual North P&I Club has improved its underwriting performance and earned a significant increase in premium income in the 2020 policy year.
The insurer said its technical underwriting loss in 2020 was $44.9m, compared with a $68.3m deficit in the previous policy year ending 20 February.
All 13 members of the International Group of P&I Clubs have indicated underwriting losses for the past policy year because of a higher than average year for high-value claims.
North P&I increased its premium income from $346.6m in 2019 to $406.2m.
The $60m increase in premium comes partly from a rate hike at last year’s policy renewal. But it is mostly attributable from increased revenue streams from subsidiary Sunderland Marine and growth in its charterers’ P&I business.
North P&I also recently launched fixed premium and hull and machinery business lines which are also bringing in additional revenue.
Branching out
Chief financial officer Ed Davies said the diversification strategy had made a “solid contribution” to the club’s earnings.
He said that he expected revenue from the fixed premium and hull and machinery businesses to contribute further in the coming years.
“The fixed premium and hull businesses are now coming online. It’s been a good a start as we could have hoped for. We know there will be more growth from those lines in next year’s figures, they are both doing pretty well,” Davies said.
Chief underwriting officer Thya Kathiravel said hull and machinery subsidiary North Hull, which launched in July last year, had benefited from a hardening market. But he said the strategy is to pursue a “slow, measured, phased growth” for the new company.
“We are coming up to our first anniversary and we are on track for our forecast premium,” he said.
North P&I was able to make up for its underwriting losses due to another healthy year of investment income. Its investments earned a 6.67% return equalling $64.5m.
The net result was that North P&I managed to increase its free reserves from $443.8m to $450.3m.
