Britannia returns more funds to members

(Posted on 02/11/20)

The Britannia Steam Ship Insurance Association Limited has declared a USD10 million capital distribution to its P&I mutual Members

Members’ renewals continue to be underwritten on their individual records, with no declared general increase (GI) for both P&I and FD&D

In September 2020, S&P re-affirmed Britannia’s A (stable) rating with capital above the AAA level with an ‘exceptional’ liquidity rating.

2020 has been challenging with investment markets severely impacted by the Coronavirus pandemic and remaining volatile. While retained claims in the current year are within projections, the picture is different for the Pool, with claims on the Pool during the first six months of 2020/21 being the highest recorded.

Successive years of low or no general increase rate rises have led to an imbalance between premium and the cost of claims. The Club will continue to redress that imbalance.

At its meeting on 20 October, Britannia’s Board recognised the challenge of having to improve rates whilst noting the Club’s continued capital strength. Addressing this challenge, the Board agreed the following series of actions;

A further capital distribution of USD10 million will be made to Members with ships on risk at midnight (BST) on 20 October 2020. This brings the total of capital distributed to Members since May 2017 to USD95 million. In the past four years Members have benefited from deferred call waivers and capital distributions totalling USD110 million.

The Managers will continue to undertake a technical based renewal of the membership, to promote sustainable premiums and restore underwriting balance. Members will continue to be underwritten individually to achieve an increase on the Association’s current estimated total call (ETC) but there will be no declared general increase. Members’ rates will be adjusted to reflect their individual claims records and risk profiles together with any Group Excess of Loss premium adjustments. There will also be minimal increases to deductible levels (which have been unchanged since the 2019/20 renewal).

Commenting on the Board’s decisions, the Association Chairman, Tony Firmin said, “I am delighted that Britannia remains financially strong despite the current challenges. The Board believes that the capital distribution demonstrates our ability to assist Members whilst recognising that an increase in rates is necessary to achieve sustainable premium levels to meet claims exposure.”