Wednesday, 15th July 2009
The ‘A' rated, 100 million GT North of England P&I Association has reported a solid financial performance in the year to 20 February 2009 despite a difficult economic climate. The club's 2009 Management Report is published today (15 July 2009).
In spite of ‘volatile and testing conditions', chairman Albert Engelsman stated North had achieved an underwriting surplus of US$ 32.4 million in 2008/09, with its combined ratio improving from 108% to 88%. This was offset by investment and exchange losses of US$ 41.3 million, resulting in a modest 4% reduction in free reserves to US$211.1 million. Net assets stood at US$ 663.5 million.
‘We believe this is a testament to North's overall financial resilience, to the conservative way in which our managers and board run the club, and to the prudent investment decisions that were made,' he said. ‘Our financial strength was also underlined when Standard and Poor's confirmed our ‘A' stable rating for the fifth consecutive year. In short, we have been tested and, although we have suffered, we have shown our resilience and have come out in good shape.'
Engelsman pointed out that the club has not had to make an unbudgeted supplementary call on its members for over 18 years, which he considered ‘a notable achievement when much of the P&I industry has had to resort to un-forecast supplementary funding in recent months'.
Managing director Rodney Eccleston stated, ‘Quality and reliability have long been watchwords at North and these virtues can only increase in importance as we work our way through the economic turmoil around us. As one of the leading P&I clubs, we continue to focus on financial strength and providing the very best service available to our members. We reached a record 95 million GT at the February 2009 renewal, which has now grown to more than 100 million GT, a welcome confirmation that we are indeed getting our "formula" right.'
Owned tonnage grew 15% to 75 million GT in 2008/09, achieving the club's medium-term target set two years ago of insuring 10% of the world's owned tonnage. Eccleston confirmed North was continuing to work towards its longer-term objective of 12.5% of the P&I market, but with the emphasis firmly on ‘quality and not quantity.'
Membership growth was achieved against a background of a 17.5% general increase in premiums and 10% rise in deductibles agreed by North's shipowner directors last year. ‘We acknowledge this was a tough year for members and we are extremely grateful to them for their continued support during the current difficult times,' said Eccleston.
Engelsman thanked Eccleston for his ‘remarkable leadership' over the past 21 years and said Alan Wilson and Paul Jennings, who are taking over as joint managing directors in September this year, will, together with the management team, continue to provide a wealth of experience.
Looking ahead, Engelsman said North had already recruited additional staff in anticipation of further growth. ‘It is vitally important that we are fully resourced to support existing and future members, particularly in these demanding times. This unbroken thread of service and quality extends beyond straight claims issues to reducing costs and reducing risks,' he said.
North currently insures a global fleet of 3750 ships entered by a total of 350 member groups. The club is based in Newcastle-upon-Tyne, UK with regional liaison offices in Hong Kong, Piraeus and Singapore.
