The London P&I Club – Standard & Poor’s Rating
In December 2018, The London P&I Club was rated by Standard & Poor’s (S&P) as BBB with a stable outlook. This was re-affirmed on 4 June 2019 following a review of our 2018/19 operating results.
Subsequently, S&P has published a new Insurance Rating Methodology (IRM) which revises the way it rates insurance organisations, including ourselves. The application of the new IRM has maintained our rating of BBB but now attaches a negative outlook.
Ian Gooch, CEO of the club’s managers (A Bilbrough & Co Ltd) says:
“Naturally we are disappointed with the revised rating which, we understand, is mainly attributable to our 2018/19 financial results. However, our capital position remains strong, with year-end free reserves of US$168.8m. Our balance sheet is robust on an absolute and historical basis and compares favourably with other IG clubs. Additionally, our Solvency Financial Condition Report confirms we retain a healthy solvency ratio. I am also pleased to see we’ve achieved much positive progress in terms of revenue and tonnage growth over the past 12 months. On those strong foundations, I have every confidence that the club will continue to deliver high quality, dedicated P&I support to our members and assureds”.
We have enjoyed a “stable outlook” for many years and so have questioned S&P over the application and process of its new methodology. We believe there are a number of questions that require clarification and, as club managers, we will continue to engage them with a view to restoring our previous rating.