West of England Renewal
The West of England is pleased to report the completion of a satisfactory and challenging renewal.
In accordance with the strategy announced in November last year, strong action was taken to ensure that all Members are appropriately rated and that the overall result is aligned with the Club’s business objective of achieving underwriting breakeven in 2011.
The Club was not prepared to reduce renewal rates from those levels justified by Members’ records, or to compete with commercial markets in order to retain tonnage. The Club was prepared for the approach to result in the non renewal of some Members who were unwilling to pay the appropriate level of premium for the risk they represented. The loss ratio of non renewed Members was in excess of 140%.
It is anticipated that the rate adjustments achieved, and the departure of Members with adverse loss ratios, will have a significant and positive effect on the technical underwriting result and the Club’s on-going capital position. The Club has also actively reduced its risk profile in certain high risk operating sectors and geographical markets, which the Managers believe will have a further beneficial impact on the Club’s future financial position.
The Club continues to enjoy strong support from its Membership, with many adding new vessels during 2010. Indications are that this organic growth will continue. In addition, some new Members have joined the Club for the 2011 policy year.
In the meantime, the Managers are pleased to note that the Club’s total net assets have increased at year end to approximately $700 million reflecting a year of strong investment performance and positive cash flow. Although it remains too early to comment on ultimate claims costs at this stage, claims numbers are also down at the same lower level as was experienced in 2009.
The Club will continue to pursue a conservative growth strategy to avoid any dilution of assets and capital reserves at the expense of the existing Membership, and all Members will continue to enjoy the benefits of first class claims and loss prevention service from a soundly financed Club with increasingly strong capital and reserve ratios.
The Club would like to thank the Membership and broking community for their support in achieving this result.