RESERVES / INVESTMENTS

MSMI maintains a substantial operating reserve which allows it to settle Members' claims quickly and to provide credible guarantees anywhere in the world. The reserve is held in a variety of ways, including cash in different currencies, bonds of varying maturity periods and equities.

MSMI uses investment income to supplement premium income wherever possible, although the investment strategy of the Club is specifically structured in order to achieve capital preservation and conservative investment returns rather than trying to achieve very high returns from a more risky strategy. The portfolio is managed by leading fund managers who report to the Board of Directors.

The proportion of the free reserve not needed for outstanding claims or creditors is termed the "free reserve" which is a measure of the financial strength of Marine Shipping Mutual.