Insurance broker Arthur J Gallagher estimates that the UK P&I Club had to pay out $82m to maintain a $100m hybrid bond that the mutual insurer took out to meet capital adequacy targets.
Gallagher’s calculations come after the UK P&I Club announced it had been given the green light from regulators to pay off the bond after 10 years.
But Gallagher’s figures may leave some wondering if the UK P&I Club has had to pay a high price to keep its capital reserves looking healthy.
