Good Results for P&I Club

The North of England P&I club's overall free reserves at 20 February 2004 increased by 34 % to reach US$ 133.5 million despite a difficult year for claims. The 50 million GT club's accounts for the 2003/04 year, which have just been approved by the directors, show a substantial improvement in investment return and further consolidation of the A- rated club's financial position.

The P&I class investment portfolio, which remains conservatively structured with 72.5 % in bonds and cash and 27.5 % in equities, generated a return of 14.11 % against a benchmark index of 12.24%. Together with exchange gains, the P&I portfolio provided a total contribution of US$ 50 million.

'Our P&I equity fund managers both exceeded their indices with returns of 58.8 % and 49.9 % respectively,' says finance director Alan Wilson. P&I class net assets increased by US$ 60 million to US$ 414 million and the P&I class free reserve increased 35 % to US$ 121 million. The FD&D portfolio, which is invested in bonds and cash, produced a return of 9.6 %, in line with its index.

Investment gains were however offset by 2003/04 being a poor year for claims. 'At February 2004 there were 21 claims over US$ 1 million, compared to 12 such claims on the 2002/03 policy year at February 2003,' says Wilson. 'Pool claims were also very high, indicating that the problem is common across the International Group clubs.'

Underwriting director Paul Jennings says the results prove the club is now of a size and quality that it can prosper even in difficult years. 'Our continually improving membership combined with our commitment to breakeven underwriting and maintenance of strong reserves means we are now better placed than ever to cope with the wave of new liabilities facing our members in the coming years.'

Tonnage entered in North of England increased at the 20 February 2004 renewal by 16 % to 50 million GT, with owned tonnage reaching a record 40 million GT. In January 2004 the club also retained its A- rating and positive outlook from Standard and Poor's. Primary analyst Peter McClean said at the time: 'The positive outlook reflects S&P's expectation that North of England will continue to outperform its peers.'