Strong growth from P&I Clubs in 2022/23

P&I Clubs have reported strong growth, with the UK P&I Club seeing gross written premium exceed $500m for the first time and the newly merged NorthStandard reporting consolidated premium income of $796m for 2022/23.

The UK P&I Club reported a combined ratio of 104% for the year ended 20 February 2023, an improvement over last year’s 115%. Mutual-owned tonnage increased at renewal this year to 153m gross tonnage, and the Club had a free reserve of $430m.

Nicholas Inglessis, chairman of UK P&I Club, said: “During the past 12 months the Club has added tonnage from both existing and new members, as well as developing its offerings in fixed premium and offshore products. The improvement in the combined ratio reflects both the improving pricing environment and the Club’s disciplined underwriting approach.

The Club said rising interest rates and global inflation impacted its investment portfolio, mostly comprised of fixed income assets, reducing by 3.8% in 2022/23.

Andrew Taylor, chief executive of the UK P&I Club, added: “The Club excels in building long-term partnerships with members through best-in-class service, supported by the experience and expertise of our people. The Club is underpinned by its financial strength, and during the year our regulatory capital ratio increased from 195% to 200%, demonstrating the ongoing resilience of the Club’s capital base.”

NorthStandard’s first annual review as a consolidated business showed the Club reported a net combined ratio for 2022/23 of 95%. NorthStandard also reported combined specialty revenues contributing over $200m towards overall 2023 premiums.

“Even at this early stage, NorthStandard is delivering as a platform for stability, growth and diversification,” said Jeremy Grose, one of two managing directors leading NorthStandard. “We have brought together the best of the approaches on which North and Standard Club both built success in specialist covers, such as offshore & renewables, strike & delay, H&M, coastal & inland, fishing and aquaculture. We have also strengthened our geographic reach with a new operating structure and wider office network, enhancing our ability to expand – particularly in Asia, the Middle East and the US.”

NorthStandard noted the backdrop of war in Ukraine, global inflation and continuing supply chain disruption, and a P&I sector rising to the challenges of complex new sanctions while still seeking to recover ground against a decade of premium erosion. Both North and Standard Club sought general increases at the P&I renewals.

“The challenges of securing this increase in a highly competitive market should not be underestimated, with shipowners and brokers extremely sensitive to increasing costs,” said Thya Kathiravel, NorthStandard’s chief underwriting officer. “Thanks to the ongoing support of our members, the overall rating increase achieved projections, and we successfully de-risked our overall exposure, with our total post-renewal premium revenues growing to over $800m.”