The West of England P&I Club earned an underwriting profit of $8m for the year to 20 February, compared with a $32m loss in 2022.
The turnaround is due to lower International Group of P&I Clubs pool claims and a decline in Covid-related claims.
There were only five International Group pool claims — which include claims by member clubs over $10m — last year and none of them involved ships entered with the West, which reduced its contribution to the pool.
However, this was partly offset by a deterioration in some of the International Group’s previous year pool claims.
The West was also able to improve its premium income through a general increase.
Chief executive Tom Bowsher said the club’s underwriting was also helped by a decision at the previous renewal to remove tonnage in which the premium did not reflect the risk.
The only setback for the West has been a decline in investment returns. All P&I insurers have been hit by an increase in interest rates and fall in global equity prices.
The West’s investments fell by 3.6%, equalling a loss of $28.3m.
“Investment markets were difficult, and high inflation and the consequent monetary tightening meant interest rates resulted in losses for fixed-income investments,” Bowsher said.
“Equity holdings also suffered during the year, but the club’s alternative assets made a positive return.”
As the club’s investment losses were greater than its underwriting profit, its free reserves fell slightly to $230.8m compared with $251.2m in the previous year.
In a more positive development, solvency improved to 176%.
Bowsher said the club is growing through its existing membership and diversified business lines.
“This strong support from our mutual members and continued conservative growth in fixed, chartering and defence products now means our club is at its largest ever size, with gross written premiums in excess of $300m,” he said.
The West recently added West Hull and West War as additional marine insurance business lines. It also has additional underwriting capacity in subsidiaries Quest, Nordic and Astaara.
