West P&I – formally known as The West of England Ship Owners Mutual Insurance Association (Luxembourg) – has released its financial results for the year ending February 20, 2022, with group chief executive Tom Bowsher (shown above in a screengrab from the video message in which he discussed the numbers) citing “very difficult” and essential decisions by the club.
According to the marine insurer, its combined ratio improved to 114% (from 140% in the previous year) while West P&I’s solvency coverage stood unchanged at 163%. The club also reported US$251.2 million of free reserve.
In his video message, Bowsher stated: “Despite continued pressures on our industry, I’m pleased to say that the club’s technical performance was far better than last year with a combined ratio of 114%. More importantly, our capital position remains strong. But as well as these positive financial results, we are also able to look ahead with confidence because of the decisive action we took at renewal as part of a planned strategy to better position the club for the future.
“West has been clear in stating that rates throughout the P&I (protection and indemnity) industry have been driven down to unsustainable levels, which do not reflect the underlying risk. Our board decided to show market leadership by setting a general increase to address this issue. And while we, of course, acknowledge that increases in premium are never welcome, this action was unfortunately essential.”
The required premium increases and term changes were achieved, with retention rate at 99% for the fleets that were offered renewal.
“We also identified a number of risks where either [members’] operating profile no longer met our risk criteria, or their record on claims performance and rating did not contribute positively to the club’s financial result,” continued the group CEO.
“The board, therefore, took the decision to de-risk by not offering renewal terms to some 22 million gross tonnes of vessels, which collectively had a combined loss ratio of 170%. This was a very difficult decision, as deliberately parting company with members is never easy and it’s something that we actively look to avoid where we can.”
Bowsher noted that the move made West P&I leaner and put it in a much stronger financial position.
He said: “West and our strategic partners will continue to support our members in these challenging times, and we do so from a position of strength. I’d like to extend my thanks to all our members and their brokers for their help in achieving our goals and for your continued support of the West. Thank you.”