The West of England has reported an underwriting loss for its latest policy year, but its figures have been buoyed by a strong investment performance.
The London-based mutual said its combined ratio for the year ending 20 February 2019 was 114%, indicating that claims and expenses exceeded premium income.
The club was hit by some expensive claims, even though the total number of claims in excess of $3m was down on the previous year.
Chief executive officer Tom Bowsher said that the West of England’s earnings would be protected from the claims.
“The club’s reinsurance programme responded so that any deterioration of these larger losses will not be to the detriment of the club’s balance sheet,” he said.
However, despite the set back on the claims, it produced a strong investment return of 3.9%, earning the club $28.6m.
The investment bonus helped maintain the West of England’s substantial free reserves, which stand at $306.4m, and its AAA capital rating.
However, the reserves were down on the $308.5m it recorded in the previous year.
Its investment capability will also be boosted by the sale of its offices located by London’s Tower Bridge.
Bowsher said: “We will, however, continue in our efforts to address the premium and claims imbalance that is affecting the entire industry.”
