West of England’s protection and indemnity book is back over 100m gt again, but it is not growth that chief executive Tom Bowsher wants to talk about when he reflects on this February’s renewal.
Rather than the 4m gt the P&I club has added in the past year, he prefers to point to figures that show over 99% of members renewed with the club.
“I think it’s been a positive renewal for the club. A lot of people focus on growth, and we have referred to that, but retention of business is also incredibly important,” he said.
“If members want to stay, then that is a positive sign and signal that we’re doing something right. The retention level of our membership was over 99% for the second year running, which was very good.”
The West went through a derisking of its book three years ago, which saw poor-performing tonnage culled. Although the club has grown this year, it is not quite back to its previous highs.
Chief underwriting officer Simon Parrot said the club is still prioritising its financial position.
He said the club has not “piled on” new membership at renewal.
Most of its growth has come from existing members who have added additional tonnage, or consolidated tonnage in the West from other clubs.
Prioritising stability
“We’re following the same trend we have in the last few years. We’re not focusing on growth but more on strengthening the club’s financial position. That is something we have done for the last three or four years,” Parrot said.
He said the club has also managed to increase premium income to ensure that rates are sustainable. Parrot asked members for a 7.5% increase this year and said, in terms of securing premium income, the club is now “bang on where we want to be”.
The strategy seems to be paying off with an A-rating awarded by AM Best and the club’s trajectory towards achieving its second consecutive annual combined ratio under 100% — indicating it is making money on its underwriting activities.
Although Bowsher downplays the growth at this year’s renewal, he has been orchestrating an expansion of the club’s insurance lines over recent years.
The club now has a virtually full house of mainstream marine covers to offer members and non-members alike.
But in terms of the critical mass of mutual P&I membership, he said size does not always pay off if a club loses touch with its members.
“Our size, I believe, allows us to form stronger relationships, and I see our clients more frequently than many of our peers,” he said.
“As CEO of the West, I have a personal relationship with about 70%, if not more of our membership, and they know who I am, along with Simon and other senior managers at the club. The personal side of our membership is very important to us.”
