No.4 2025/26 - Class 1 and Class 2 Policy Year Balances and Financial Position at 20 February 2025
May 2025
The Report and Accounts for the year ending 20 February 2025 for The West of England Ship Owners Mutual Insurance Association (Luxembourg) were approved by the Board on 14 May 2025, who are pleased to note another positive year for the Club.
You can view our Financial Highlights video here and the full Report and Accounts 2025 will be published in due course.
Financial summary for year-ending 20 February 2025
- Three year combined ratio average 98.4% (2024: 101.9%)
- Combined ratio 103.9% (2024: 94.5%)
- Gross earned premiums USD 347.6m (2024: USD 325.6m)
- Earned premiums, net of reinsurance USD 284.8m (2024: USD 268.7m)
- Claims incurred, net of reinsurance USD 232.1m (2024: USD 196.7m)
- Investment return gain of USD 41.4m (2024: USD 30.8m)
- Free reserve USD 306.1m (2024: USD 276.3m)
- Capital - solvency coverage 190% (2024 195%)
Financial commentary
Gross premium increased by 7% to USD 347.6m reflecting strong support from the Membership in the Club’s mutual cover as well as from its increased product offering.
This premium growth has helped the Club to mitigate what has been a more challenging year for large losses within the International Group (IG). The 2024 activity has given rise to a higher cost than budgeted despite the Club’s relatively low Pool share. Seventeen claims were notified to the IG, including one from the West, and the cost of these Pool claims to the West is more than three times the preceding two years at the same stage.
The Club’s own claims were below their expected level but nevertheless, after two successive years below 100%, the Pool losses increased the Club’s combined ratio to 103.9%.
Despite this, the Board’s primary operating performance measure of a three year average combined ratio below 100% is the best it has been for 8 years at a level of 98.4%, demonstrating the considerable and consistent progress the Club has made.
The investment return was again strong, with all asset classes contributing positively and the Club’s investment portfolio returned 5.6% for the year, which earned a net USD 41.4m.
The Free Reserve increased again to USD 306.1m, capital as measured by the rating agencies improved and the solvency coverage is estimated to be 190%.
Policy Years and Release Calls
In setting the level of release call percentages for each open Policy Year for Class 1 and Class 2, the Board has taken into account the Club’s overall capital position and all the factors that are set out in Clause 8 of the International Group Agreement:
Class 1 (P&I)
2022/23 – Closed without further call
2023/24 - Release call reduced to 7.5% of the estimated total mutual call
2024/25 – Release call maintained at 15% of the estimated total mutual call
2025/26 – Release call maintained at 15% of the estimated total mutual call
Class 2 (FD&D)
2021/22 – Closed without further call
2022/23 – Release call reduced to 0% of the estimated mutual call
2023/24 – Release call reduced to 7.5% of the estimated mutual call
2024/25 – Release call maintained at 15% of the estimated total mutual call
2025/26 – Release call maintained at 15% of the estimated total mutual call
Yours faithfully
For: West of England Insurance Services (Luxembourg) S.A.
(As Managers)
T Bowsher
Group CEO