Deterioration of 2015 year of account forecast at Standard Syndicate 1884

Standard Syndicate 1884, run by Charles Taylor Managing Agency Limited (CTMA) is now forecasting that the result for the 2015 year of account (YOA) of the Syndicate has deteriorated since the previous forecast was reported in the Syndicate’s QMR on June 30th this year:

The syndicate stated in a capacity auction disclosure that its forecast for the 2015 year had deteriorated from a best case of minus 15.0% on capacity to a best-case of minus 29.9%.

The worst case scenario has worsened from minus 35.0% of capacity to minus 49.9%.

The current attritional loss development on the Hull account, which is currently running at greater than 100% loss ratio, is assumed to continue to term. The Hull account makes up just over 50% of the syndicate’s premium for the YOA. Ultimate gross net premium projection has also been reduced from £33.5m at end of Q2 to £31.9m at end of Q3. CTMA said that there was still uncertainty regarding the ultimate development of the YOA. Earned premium as at September 30th 2016 is almost 80% of the ultimate projection.

Meanwhile, for 2016 YOA, CTMA’s current internal forecast remains at (4.7%). The primary driver is the reduction in ultimate gross net premium projection to £73.7m — against the business plan forecast of £85.2m — “due to challenging market “conditions. The Hull account for 2016 YOA has been cut to about 30% of total premium. CTMA said that “while there is significant uncertainty regarding the ultimate development of the YOA after nine months, claims incurred activity is lower than at the same development period for the 2015 YOA.”

In late October CTMA said that the Syndicate continued to receive support from several sources of capital, both Names and corporate capital. “The Standard Club is the cornerstone capacity provider of the Syndicate and plans to continue providing 40% of the capacity for 2017 YOA.”

In 2016, the Syndicate has added four new underwriters, which CTMA said late last month would further increase its ability to write its plan in 2017.

(1) Joshila Tailor, Fine Art and Specie Class Underwriter; previously with Pembroke Managing Agency.

(2) Sajjad Jaffer, Marine Liability Class Underwriter; previously with Chubb Managing Agency.

(3) Hubert Belanger, Political Risk Class Underwriter; previously with Atradius and Chubb Insurance.

(4) Alexandra de Souza Mattos, Political Violence & Terrorism Underwriter; previously with Kinetic Insurance Brokers and RFIB Group.