2022 FINANCIAL STATEMENTS – BRITANNIA P&I CONFIRMS RESULTS
Published: 29 September 2022
- Strong 2022/23 renewal with significant increases in both owned and chartered tonnage
- Overall deficit after tax of USD14.0m
- Investment return of USD16.0m
- Negative underwriting result with net claims in excess of net premiums
- Free reserves at USD588.0m
- Further USD25.0m capital distribution in October 2021
- The last aspects of the Part VII Transfer were completed in January 2022
- In October 2021 S&P affirmed the rating of A (Strong) but assigned a negative outlook, referring to the high cost of Pool claims across the IG and the need for all Clubs to raise rates
The Group underwriting result was negative again this year, with net claims incurred in excess of net earned premiums. The investment performance this year produced a much smaller gain than in the recent past after some dramatic movements in markets in the fourth quarter. Total calls and premiums were higher than in the prior year, at USD216.9m compared with USD200.1m. There was again no general rate increase at the 2021/22 renewal, but individual Members’ rates were adjusted to reflect their claims record and risk profile where necessary. Reinsurance costs were higher primarily due to rate increases on the International Group’s reinsurance programme. In October 2021 there was a further capital distribution to Members of USD25.0m.
Claims incurred in the financial year were significantly higher than the prior year. Retained claims incurred in the 2021/22 policy year at the 12-month stage were USD143.9m, slightly higher than the 2020/21 policy year at the same stage. 16 claims that are currently expected to cost more than USD1.0m were reported, with an aggregate estimate of USD46.4m. This is lower than the prior policy year, which saw 20 incidents reported with an aggregate cost of USD63.4m. Pool claims had a spike in the first half of the year but settled down after that, albeit they stand at USD487.0m which is a record high at the 12-month stage of a policy year, surpassing the 2020/21 total of USD478.1m at the same stage. In total, 11 incidents had been reported compared to 22 in the prior year. The development of prior year claims has generally continued to see improvement, but the 2020/21 policy year has seen a number of late notifications that has reduced the overall improvement and led to an increase in the net provision this year. Nevertheless, USD45.4m was released from the claims provisions held in respect of those years.
Andrew Cutler, Britannia’s CEO, commented as follows:
“Britannia is enjoying continued growth, thanks predominantly to the loyalty of Members, with entered tonnage at a record high. Reflecting this growth, the Managers continue to invest across all functions and in all of its regional hubs. Key to Britannia’s strength remains the provision of quality service, while maintaining its financial strength.”
| KEY FINANCIAL
|ENTERED TONNAGE (OWNED)||134.7||125.2|
|ENTERED TONNAGE (CHARTERED)||73.5||53.5|
|CALLS AND PREMIUMS||216,931||200,086|
|NET CLAIMS INCURRED||(164,888)||(160,676)|
|NET OPERATING EXPENSES||(39,113)||(32,799)|
|NET INCOME AFTER TAXATION||13,950||42,451|
|NET LOSS RATIO||94.1%||99.6%|
|STANDARD & POOR’S RATING||A (negative)||A (stable)|
* In accordance with the International Group Agreement 2021 Britannia is required to disclose the average expense ratio for its P&I business for the past five years. This measures all of Britannia’s costs, except those related directly to the management of claims, as a percentage of call, premium and investment income for a five year period.
For further details please refer to the Britannia Financial Review and Update and the full Britannia Annual Report and Financial Statements 2022 available on our website. Our Financial Profile is also available on our website (www.britanniapandi.com).
Neil Smith, Head of Communications, Tindall Riley (Britannia) Limited: +44 (0)7741 800420