Active Underwriter A Craggs

The Lloyd’s syndicates have now published their results and, in some cases, added detail and an outlook for 2020. As in the past two years, IMN is summarizing the results from all syndicates that have a marine interest which have provided some information on the marine side.

Syndicate 1274 is a provider of global insurance and reinsurance products. The Syndicate is fully aligned with 100% of its capacity provided by QIC Global. The parent company of the QIC Global Group is QIC Global Holdings Limited, a UK registered company. QIC Global Holdings Limited is wholly owned by Qatar Insurance Company QSPC (“QIC” formerly Qatar Insurance Company SAQ), a composite insurer listed on the Qatar Exchange.

QIC Global Services Limited (“QGSL” formerly Antares Underwriting Services Limited) provides insurance services to the Syndicate under an outsourcing agreement with AMAL.

In 2019 the Syndicate produced a profit of $28.4m (2018: $42.8m loss). The syndicate said that natural catastrophe activity had “returned close to the 30 year average following the industry’s costliest back-to-back years for insured losses in 2017 and 2018”.

The combined ratio was 101% (2018: 108%). The syndicate said that, although much improved, the combined ratio reflected the challenges that persisted in the market.

With marginal losses in the insurance portfolio, the Syndicate was able to rely on investments for its overall profitable performance.

KPIs $000s 2019 2018
Gross Premium Written 605,041 586,374
Net Premium Earned 510,943 475,173
Net Claims Incurred (343,423) (347,541)
Net Commission (123,322) (120,863)
Net Underwriting Result 44,198 6,769
Investment Return 36,624 (3,206)
Net Profit/(Loss) 28,449 (42,791)
Combined Ratio 101% 108%

Premiums

The whole account grew by 3% to $605m (2018: $586m) through the expansion of growth initiatives in the Specialty division. This included Cyber & Technology and Motor. Growth was partially offset by a reduction in the Property division, where the Syndicate shed around a third of its portfolio. The syndicate said that market conditions “continued to underwhelm, albeit in line with the Syndicate’s realistic expectations”, with an overall rating improvement of 6%.

Claims

Net claims incurred of $343m (2018: $348m) saw the Claims Ratio decrease from 73% to 67%. Claims however were worse than expected and were the cause of the combined ratio being in excess of 100%. There were no individually significant losses. Rather, there was an accumulation of attritional and large losses, most notably in the Property D&F, Aviation, Hull and Cargo classes.

The Reinsurance division saw windstorms Dorian, Faxai and Hagibis together accounting for $14m. This was broadly in line with the Syndicate’s expectations for annual catastrophe losses and did not therefore impact overall profitability significantly.

Investments contributed $36.6m (2018: $3.2m loss), representing a 5.6% yield. The strong performance was the result of gains generated on the fixed income portfolio due to falling yields across the markets.

Sectors

2019 Gross Written Premiums Gross Premiums Earned Gross Claims Incurred Gross Operating Expenses Reinsurance Balance Total Net Technical Provisions
Direct MAT 211,357 220,047 (149,600) (68,990) (11,008) (9,551) (313,022)
Total 605,041 604,589 (406,476) (174,521) (30,593) (7,001) (943,452)
2018 Gross Written Premiums Gross Premiums Earned Gross Claims Incurred Gross Operating Expenses Reinsurance Balance Total Net Technical Provisions
Direct MAT 199,927 196,317 (148,425) (64,438) (14,332) (30,879) (326,211)
Total 586,374 556,901 (339,599) (167,026) (86,670) (39,394) (933,605)

https://www.lloyds.com/investor-relations/financial-performance/syndicate-reports-and-accounts/2010/03/1274