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May 12, 2004

Miller makes UK Club management team changes

Thomas Miller has announced changes, effective September 1, 2004, at the top of its UK P&I Club management team.

Luke Readman, 54, will become Chairman of Thomas Miller P&I and Hugo Wynn-Williams, 48, will take up the new role of Chief Executive.

Current Thomas Miller P&I Chairman Stephen James will remain actively involved in the UK Club's management in a senior role and continues as Chairman of the group holding company, Thomas Miller Holdings.

James, 58, said: "The changes represent long term succession planning. Luke and Hugo bring many years' experience to their new roles, having been with Thomas Miller for 32 and 26 years respectively. They are natural choices to take over the leadership of the Club's P&I management team.

"I will not be retiring from Miller's for another two years but we felt it wise to announce these changes now. Our new P&I management team will be established well in advance of October 2005 when a new Chairman of the shipowner board of the UK Club is scheduled to succeed Aleco Kairis."

Separately, the UK P&I Club has reported a surplus of US$40 million for the year ending February 20, 2004, compared with a deficit of US$31 million in the previous year. Free reserves grew to US$219 million from US$179 million, an increase of 22 per cent.

Underlying the improved financial performance was a strong investment return of US$129 million---at 18 per cent a record for the club---and an increase in premium during the year to US$305 million. This, says the club, has provided a welcome boost to reserves.

The weakness of the dollar contributed to this performance, in contrast to past years when the dollar's strength reduced investment returns.

There was a small recovery under the club's reinsurance contract with the Swiss Re in respect of stop loss cover for claims in the 2002 and prior policy years. There was no adjustment to the premium payable to Swiss Re for future years.

During the year, Standard & Poor's assigned an A rating to the UK Club, the highest enjoyed by any club in the International Group.

Owned ships entered in the club increased by about 5.5 million gross tons during the year, a rise of six percent. This was a reflection of additions to existing members' fleets and owners entering tonnage for the first time.

Looking ahead, the club believes it would be "imprudent to assume investment returns continuing at the same level." It has assumed a five percent annual return for planning purposes.

The club has continued to take a cautious approach to the level of future claims. The 2002 policy year volume was exceptionally heavy across the marine insurance industry, with an unusually high number of major casualties. Claims on the 2003 policy year were not as large but the club remains cautious, given the prospective effects of dollar weakness and strong shipping activity.

The modest investment outlook and upward trend in claims had already led the club's board to order a 17.5 per cent general increase in premiums for the 2004 policy year.

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