The UK P&I Club will be passing on its occupational disease liabilities to Randall & Quilter (R&Q).
Expected to be completed within the next two years, the transfer will involve liabilities worth US$103.8 million (around £84 million) on an undiscounted basis. It will be subject to the approval of the High Court in London and will be overseen by the Prudential Regulation Authority and the Financial Conduct Authority.
“Most occupational disease claims result from seafarers being exposed to asbestos on ships, going back as far as the 1950s,” explained R&Q. “It can be 40 years or longer before symptoms of any disease occur and these can often be fatal, and the resulting compensation awards can be significant.
“These claims are very uncertain and volatile, and the exposure will continue for many years to come.”
According to the non-life legacy insurance investor and capacity provider, it has concluded a reinsurance agreement with the UK P&I Club in the interim so that the marine insurer’s current membership gets to recognise the benefits of the overall transaction.
“Transferring these claims to a recognised and well-regarded occupational disease specialist, such as R&Q, will significantly improve the club’s capital position and bring finality to a highly volatile book of claims,” stated UK P&I Club chair Nicholas Inglessis. “This will greatly benefit the club’s current members.”
Meanwhile R&Q executive chairman Ken Randall commented: “Occupational disease liability can negatively impact a club’s capital outlook and risk appetite. This transfer agreement will allow the UK Club more flexibility and stability in planning its financial future, while ensuring any claimants remain unaffected.”
