2017 FINANCIAL STATEMENTS – BRITANNIA DECLARES A USD20M CAPITAL DISTRIBUTION TO MEMBERS

Highlights

 

  • Britannia reports an exceptionally strong financial performance, with an aggregate USD88m surplus for the year.
  • The Board approves a capital distribution of USD20m to be paid to Members with ships on risk as at 9 May 2017.

Financial summary

 

The Association posted a strong underwriting result for 2016/17, with a USD38.9m surplus, while making a USD28.7m gain on its investment portfolio.  Overall, the Association’s balance sheet reserves rose by USD33m and the surplus assets in Boudicca, which are available to meet future claims, rose by USD55m.  This gives a combined surplus for the year of USD88m.

Given the further strengthening of the Association’s resources, the Board has announced a USD20m capital distribution payable to Class 3 Members with owned ships on risk as at 9 May 2017 (pro rata based on premium).  This immediate benefit to Members underlines the Association’s commitment to mutuality and reflects its continuing financial strength.

That strength also enabled further waivers of deferred call (announced in October 2016) totalling USD10.8m (a further waiver of 2.5% from 2014/15 and 5% from 2015/16).  Combined, the capital distribution and waivers mean that USD31m will be returned to Members. This follows a zero general increase for the 2017/18 renewal.  At its October 2017 meeting the Board will review the Association’s ability to further assist Members.

Claims

 

The value of claims incurred in the 2016/17 policy year was extremely low. The main driver was the average cost of large claims (those expected to cost the Association USD1m or more). While comparable in number with previous years, the overall cost of those claims was almost a third lower than in 2015/16. Claims reported by the International Group Clubs to the Pool were also similar in number to the prior year but, again, the aggregate value was significantly lower.

Chairman’s statement

 

Commenting on the results for the year, the Association’s Chairman, Nigel Palmer OBE, said:

“Britannia’s 2016/17 report and financial statements highlight its strength and the Board’s decision, at its meeting in Taipei, to declare a capital distribution of USD20m is of immediate benefit to its membership. The capital distribution and the USD10.8m of deferred call waivers already announced emphasise the Association’s commitment to mutuality.

2016/17 has also seen initiatives to enhance service, through the expansion of our Hong Kong office and the Managers’ acquisition of our Exclusive Correspondent in Japan, now known as Tindall Riley (Britannia) Japan. This reinforces our commitment to Asia which is home to over 50% of Britannia’s membership and a region where many Members trade regularly.”

 

Contacts

Jo Rodgers, CFO, Tindall Riley (Britannia) Ltd                  +44 (0)7921 233714

Andrew Cutler, CEO, Tindall Riley (Britannia) Ltd              +44 (0)7738 997329

KEY FINANCIAL STATEMENTS

20 Feb 2017

20 Feb 2016

20 Feb 2015

(gt million)

(gt million)

(gt million)

Entered tonnage (owned)

100.9

105.9

108.5

Entered tonnage (chartered)

15.0

35.5

27.0

USD(000)

USD(000)

USD(000)

Calls and premiums

225,854

260,272

269,726

Net claims incurred

(130,268)

(167,654)

(156,241)

Investment income

28,716

(23,500)

3,954

Net operating expenses

(25,719)

(26,986)

(24,963)

Net income after taxation

32,946

(24,871)

18,269

Free reserves*

379,342

346,396

371,267

 

Net loss ratio

80.9%

86.1%

79.5%

Average expense ratio

9.42%

9.12%

8.43%

 

Standard & Poor’s rating

A (stable)

A (stable)

A (stable)

*The Association benefits from a reinsurance contract with Boudicca Insurance Company Limited

USD (000)

USD (000)

USD (000)

Boudicca’s surplus assets available to meet future claims by the Association

221,700

166,300

174,300

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