West Regains A- Rating After Nearly Four Years

Image: West P&I

A recent assessment by S&P Global Ratings shows that West P&I has regained its A- financial strength rating nearly four years after being downgraded to BBB+ in 2022. The new rating highlights the Club's strong ability to meet the insurance obligations of its Members and its improved capacity to withstand future financial pressures.

As one of the 12 Protection & Indemnity Clubs that form the International Group, West has been providing marine liability insurance to shipowners, charterers and operators for over 150 years. The financial strength of a P&I Club is crucial for both existing and prospective Members, as it indicates the Club's ability to meet covered claims and remain financially stable during difficult periods.

S&P Global Ratings provides an independent analysis of this financial strength by considering factors such as business position, capital and earnings, and market risk.

As a result of a combination of poor investment market performance and major underwriting losses, several P&I Clubs, including West, experienced a weakened

capital position, leading S&P to downgrade the Club from A- to BBB+ in 2022.

Following the downgrade, West steadily improved its underwriting performance over the following years. As Group CEO Tom Bowsher highlighted, 2025/2026 marked "the fifth year in a row that the Club’s combined ratio has been better than the average of our IG peers". The stronger investment returns also played a crucial role in helping the Club to build its capital position and return to an A- rating.

From an insurance perspective, West utilised a more selective approach to underwriting by carefully assessing the risks it accepted, focusing on balancing growth against the need to charge premiums that sufficiently reflected the expected cost of claims. This was visible in West's combined ratio, which improved from 103.9% in the previous year to 98% in 2025/2026. Simply, this shows that the Club shifted from making a loss for every $100 earned in premiums to making an underwriting profit, as the cost of claims and expenses fell below its premium income.

From an investment perspective, West benefited from a notably strong investment year. The figures published by the Club show that the investment portfolio generated approximately $65 million, while its free reserve jumped by 23% to a record $376.8 million.

The Club's reserves benefitted the most from its investment strategy. However, the improved combined ratio enabled West's insurance business to operate profitably instead of relying on investment markets to cover underwriting losses. Together, these factors contributed to West's return to an A- rating.