The Club's Report and Accounts at 20 February 2012 are published today and are available for download from our website.
In his Statement, Chairman Matheos Los says:
"In my review last year, I described some of the measures that we have been taking to further strengthen our financial performance and in particular our underwriting results. It is gratifying to report that this year’s figures clearly demonstrate that they are proving effective with a further significant improvement in our overall combined ratio to below 109%. Of particular significance was our decision not to renew a number of Members with high risk exposure and persistently adverse records at the February 2011 renewal. The positive effect on the frequency and severity of claims from our Members this year has been remarkable. Not only have we recorded fewer claims for the 2011 policy year than for any year since 2000, but we have also seen a substantial reduction in the number of larger claims, a trend which appears to be on-going in 2012. This satisfactory outcome has been complemented by continuing stability from earlier policy years. Our Members’ claims, particularly for 2009 and 2010, have developed favourably and have enabled our projected claims costs for those years to be reduced without compromising the strength of our projections for claims that have not been reported fully or reported at all.
On a less positive note, two incidents which have received widespread publicity even outside shipping circles had a disappointing effect on our performance. The two large casualties from other Group Clubs involving the containership RENA and cruise vessel COSTA CONCORDIA are of such severity that each is a full claim on the Pool. Together they also absorb the entire extent of risks that Group Clubs retain within the first layer of the Group’s excess of loss reinsurance contract. As a result Pool claims from other Group Clubs for 2011 are more expensive than initially expected.
The investment market was also particularly difficult. Unresolved anxiety about sovereign debt in the Eurozone and in particular the economic and political fate of a number of euro States created great uncertainty as the year progressed. These factors combined with increasing demands for a more conservative investment policy resulted in a modest return of only 2% on our assets overall.
Despite these concerns, the overall free reserve at year end has been maintained at a little under $180 million, a reduction of only some $3 million from the figure a year ago. The improved underwriting position and lower risk profile which results from our planned reduction in entered tonnage in 2011 mean however that the Club’s overall capital position is now stronger than a year ago. Our coverage of solvency margins under existing rules, and, more importantly, under Solvency II which we still expect to enter into effect within the next two years has again increased in line with the financial objectives we have set in our business plan."