The West of England club has been awarded a financial strength A-rating with stable outlook by AM Best in the latest sign of an improving business environment around P&I clubs.
The credit agency said the rating reflects “West’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.”
It said the club had shown “prudent reserving” for claims and “good liquidity”.
The West’s fortunes turned around in the last financial year when it reported a profit on its underwriting activities with a combined ratio of 96.7%, its strongest performance since 2017.
With an annual premium of $320m, the West has a solvency coverage of 176%.
Generally, mutual clubs have benefited since last year from a fall in high-value claims over $10m, which are pooled under the International Group of P&I Clubs.
An improvement in the investment market and higher premium levels have also helped support earnings.
Improving trend
West chief executive Tom Bowsher said: “Members’ own claims performance for policy year 2023 is better than the last three policy years and the club’s pool share is the lowest it has been since 2015. This, and a more favourable investment environment, means the club’s capital is continuing its improving trend.”
Bowsher has been keen to diversify the West’s business and recently added hull and machinery and war risk insurance lines.
P&I clubs will shortly announce their policy on general increases for next year’s February policy renewal.
