No.2 2021/2022: Class 1 and Class 2 Policy Year Balances and Financial Position Feb 2021

Financial Position

The ongoing Covid pandemic has meant a challenging year for the Club on all fronts, especially in respect of investment markets and claims. It has of course also been a difficult period for our Members - especially with regard to their crews - and for the Club’s staff but we are pleased to note that service levels have been maintained throughout.

Investment performance was positive, particularly bearing in mind the market turmoil when the pandemic first hit, with a return of USD33.3m (4.6%) reflecting the Board’s conservative investment strategy which served the Club especially well during the turbulent start to the year.

The technical result has however been impacted by a number of factors:

• Continued, market-wide underrating of tonnage relative to risk;

• Increased contributions towards record levels of high value claims in the International Group Pool, with Policy Year 2020 tracking above Policy Years 2018 and 2019 which are already the highest for a number of years at equivalent points;

• Our Members’ own claims performing poorly, particularly the severity of large losses including four claims that the Club had to notify to the IG Pool, such that the incurred cost is higher than in any preceding year at the 12-month point; and

• Covid-specific claims in excess of USD10m, together with general difficulties in claims handling caused by the effects of the pandemic.