London P&I Club Reports Increased Free Reserves

The London P&I Club’s result for the 2013/2014 financial year produced an overall surplus of $6.6m, increasing the free reserve to $160.6m.

There was an increase in P&I claims costs within the club’s retained layers in the financial year. The club’s management team notes that this was driven by an increase in the cost of claims in the higher-severity bands, which overshadowed an encouraging outturn for claims within the lower-severity layers, particularly at the day-to-day attritional level.

There was a reduction in the level of claims involving the International Group Pool compared to the very high levels recorded for 2011/2012 and 2012/2013, although the cost remained relatively high.

In the year to 20 February 2014, the London Club recorded a return on invested assets and cash of approximately $24.4m, or 7.0 per cent, reflecting positive performance across each major asset class, in particular the equity component of the portfolio.

Over the course of the policy year there was steady growth in the entry of ships with the club, from existing as well as from new members based in countries which included China, Greece, Singapore, Turkey, and the UK.

Going into the current policy year, the club’s owned mutual entry had increased by approximately 2m gt to 43.1m gt, in addition to which the charterers’ facility continues to perform steadily.