The UK Defence Club, the leading provider of FD&D (legal costs) insurance to the maritime industry, announces its financial results for the year ended 20 February 2018.
Ships entered totalled 4,200, an increase of 7%
Free reserves £34.1 million
Gross written premium of £22.9 million
Net surplus for the year £4.9 million
Clubs continuity credit scheme returned capital, up 9% on previous year
Petros Pappas, Chairman, UK Defence Club, says: “It has been an exciting and successful year for the Club. However, I do foresee significant issues ahead for owners and operators which could result in a significantly volatile claims environment. Future changes in regulations, particularly as regards low sulphur fuel oils, have the potential to give rise to many issues.
“This is where a strong and stable FD&D Club will play its part – advising, collaborating, funding. As with the collapse of OW Bunkers owners and operators should not underestimate the significant cost that some of these disputes will certainly bring.
“Brexit looms large. This Club will be establishing a European presence in Cyprus through which we will be able to continue writing European business.”
Daniel Evans, Club Manager, Thomas Miller Defence, says: “The Club continues to be in a strong financial position, ensuring it is well-placed to support Members in dealing with the challenges that may lie ahead. Overall the Club produced a net surplus of £4.9 million, after rewarding Members with a reduction in premium under the continuity credit scheme.
“Following a volatile claims period during the 2008 – 2011 policy years, and increased claims cost in 2014 policy year, subsequent to the OW Bunkers insolvencies, claims have been more benign. However, as the Chairman warns, there are potentially significant issues which could affect the claims environment in the future. The Club has supported in excess of 90% of cases to the full extent and has no mandatory deductibles. It covers legal costs insurance of up to US$15 million, for all disputes, and has never sought to impose release calls. Combined, we believe this makes the Club an attractive proposition.”