Lloyds Syndicate Results 2017 (30): Channel Syndicate 2015

With the 2017 numbers for the Lloyd’s syndicates now in, IMN over the next few weeks will report on the marine numbers for those syndicates with a significant interest in this area.

Scor’s Channel 2015 syndicate had GPW of £263.0m in 2017, up from £241.5m the previous year. The loss was £46.92m, compared with a loss of £19.89m the previous year. The combined ratio was 127% in 2017, up from 112% in 2016.

Channel noted that 2017 was a year marked by an exceptional series of large natural catastrophe losses including Hurricanes Harvey, Irma and Maria (HIM) in the U.S. and the Caribbean, and wildfires in California. These catastrophe losses were compounded by a high frequency of large losses during 2017 but despite this elevated level of activity, the property account did benefit from a release of reserves during the financial year.

The reinsurance protections purchased by the Syndicate are designed to protect against frequency and severity of potential catastrophe events and worked as planned. However, the nature of the 2017 catastrophe events resulted in the Directors determining that it would be prudent for additional reinsurance to be purchased to provide additional cover until the expiry of those programmes during 2018.

Following the significant catastrophe losses experienced in the third quarter of 2017, we agreed with our capital provider SCOR Underwriting Ltd (SUL) that we would make a combined cash call of $50m across the 2016 and 2017 Years of Account (representing 9.17% and 9.16% of syndicate capacity respectively) to assist in the various funding requirements arising from these events, including the US Situs regulatory funding as well as the provision of loss funds to ensure our clients’ claims were settled on a timely basis.

The total Syndicate capacity for the 2018 year of account is £225m compared with £226m in 2017. The small reduction reflected our view of expected market conditions when we submitted our plan to Lloyd’s in September 2017 before the significant catastrophe losses had occurred.

GPW in marine was £20.94m, down from £24.21m the previous year.

Marine direct premiums were £9.80m in 2017, down from £10.85m the previous year. The marine direct total for 2017 was a loss of £2.99m, compared with a loss of £837,000 in 2016.

https://www.lloyds.com/investor relations/financial performance/syndicate reports and accounts/2015/2015