Financial Review

Financial Review

Combined Summary

Free Reserves

Influenced by the improving claims experience, the Free Reserve at 20 February 2016 increased by approximately US$90 million to US$428.4 million. The combined ratio was 73.3%, producing the best technical underwriting result for the Club in recent times. 

The five year average combined ratio of 95.7% is amongst the best in the IG, maintaining the Club’s long term aim of producing financial stability.

 

Free Reserves2
 

Investments

Despite North's conservatively positioned investment policy, the challenging conditions experienced during the year resulted in a loss of US$12.8 million.

In a volatile 12 months, investments in equities and corporate bonds lost 7.7% and 4.9% respectively, whilst government bonds, the main investment class, produced a positive return of 1.73%.

 

PI Asset Allocation

 

Sunderland Marine

The overall result for SMI was a minor loss for the year of US$0.8 million. This represents a significant improvement on the US$12.2 million loss experienced in the previous year, vindicating the efforts made during the integration process aimed at simplifying the SMI business, reducing costs and improving profitability.

The 2015/16 year loss was also influenced by a number of non-operational factors, including a foreign exchange loss of US$2.7 million, a revaluation loss of SMI’s former headquarters in Durham of US$2.4 million and one-off costs associated with the integration of the business (including redundancy costs) of US$2.3 million. These losses were also offset by a gain of US$4.6 million following the revaluation of the pension scheme liabilities.