UK P&I Club redeems $100 million Hybrid bond


The UK P&I Club (‘the Club’), one of the leading providers of protection and indemnity insurance, announced the Board agreed to redeem its $100 million hybrid bond following PRA approval.

In July 2008, the Club was the first P&I Club to raise $100 million of new capital in preparation for the introduction of the EU Solvency II directive in 2012. The Hybrid bond was a cost effective way of increasing the Club’s regulatory solvency capital over and above free reserves and allowed greater flexibility in its investment strategy.

The Club’s capital has improved by $300 million over the last 10 years. At the year-end 20th February 2018, the Club was in a strong financial position, with investment returns of 6.1% and good claims experience increasing free reserves to $540 million. The Club can meet its risk appetite for capital both with and without the Hybrid capital.

UK Club Chairman Alan Olivier says: “We have come a long way in the last decade, and now the financial strength of the Club is amongst the best in the industry. Hybrid capital helped the Club to strengthen its capital base to where it stands today at $540 million.

The Club will still hold sufficient capital to retain its indicative “AAA” rating under the Club’s S&P model once Hybrid is redeemed.”



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