West Successfully Executes Highly Targeted Renewal Strategy
The West of England P&I Club has today announced its financial results for 2021. Thanks to the successful implementation of a planned renewal strategy built around necessary premium increases and selective de-risking, West is in a strong position to meet future challenges.
An improved technical performance saw West’s combined ratio improve to 114%, despite a particularly challenging environment for the industry. Without Covid claims the reported combined ratio would have been below 101%. The Club’s Free Reserve is $251.2m and the capital position remains strong, with West’s solvency coverage is 163% unchanged from last year and a rating of A- re-affirmed by S&P in November.
Historically high International Group Pool claims, coupled with Covid claims and increasing general claims inflation have created significant challenges for all P&I insurers. This has been exacerbated by a persistent underrating in the market over several years.
In light of these factors West embarked on planned renewal strategy in consultation with its Board, which saw the Club not only show market leadership with its general increase for premiums but also undertake a deliberate de-risking of tonnage which did not contribute positively to the Club’s financial performance. Through those actions the Club is now in a strong position and well placed to continue to support its Members through these difficult times.
Simon Parrott, Underwriting Director at West, commented, “Claims volatility and record Pool levels have continued in earnest over the past 12 months, with Covid-related issues continuing to impact our Members. Despite these negative pressures, our combined ratio of 114% represents a significant step in the right direction.”
Tom Bowsher, Group CEO at West, commented, “West was one of the first to publicly say that there was an underrating in the market and our Board’s clear renewal strategy to address this and to selectively de-risk the Club has delivered a stronger and leaner Club ready to support our Members.”