Lloyd’s Syndicate Results 2017 (39): Markel syndicate 3000

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.

Markel Syndicate 3000 – Active Underwriter Paul H Jenks – is the Lloyd’s platform for Markel International Limited (MINT), which also writes business through Markel International Insurance Company Limited (MIICL).

The principal activity of the Syndicate is the transaction of general insurance and reinsurance business from its offices in London and its overseas operations in Canada, Singapore, Labuan, Hong Kong, Switzerland, Dubai and Brazil.

The Syndicate operates three London based underwriting units, namely Specialty and Financial Lines, Marine, Energy and Property, Reinsurance as well as units in Asia, Latin America and Canada. The Syndicate’s Singapore office operates as a regional hub, supporting the Labuan and Hong Kong offices and underwrites marine and energy, professional and financial and trade credit risks throughout the Asia Pacific region. The Syndicate is also a member of Lloyd’s platforms in Dubai, Shanghai and Japan.

One of its three London wholesale units is Marine, Energy and Property. Within this, Marine Coverage includes primary and excess coverage for liability, hull, war, terrorism, specie and cargo risks worldwide.

The cargo account comprises a portfolio of transit and storage risk covering most industries on a global basis.

The hull account covers physical damage to ocean-going tonnage, yachts, building risks and mortgagee’s interest.

The liability account provides coverage for a range of energy liabilities, while the terrorism account covers physical damage resulting from terrorism, strike, riots, war and political violence. The war account offers coverage for marine and aviation war across all vessel types and tonnages.

The syndicate booked a loss for the financial year of £80.5m, compared with a profit of £37.6m the previous year. The technical result was a loss of £102.7m, compared with a gain of £11.6m the previous year, and was significantly impacted by £74.7m of natural catastrophe losses arising during the third and fourth quarters of 2017; namely hurricanes Harvey, Irma, Maria and Nate; the Mexico City earthquake; the Northern  and Southern California wildfires.

MINT said that, while none of these catastrophe losses individually or in total exceeded the Syndicate’s risk appetite for market events of this size, they contributed 16.1 percentage points to the combined ratio.

The 2017 underwriting loss was also significantly impacted by a change to the Ogden discount rate.

The adverse impacts to the underwriting result were partially offset by a release from prior year reserves of £59.2m, up from a £57.6m release in 2016.

Syndicate GWP in 2017 was £564.6m, up from £485.8m the previous year. The loss of £80.5m compared with a gain of £37.6m in 2016. There was a loss of £1.37m on FX in 2017, compared with a gain of £7.83m in 2016.

The combined ratio in 2017 was 121.7%, up from 97.0% in 2016.

The Syndicate capacity for the 2017 year of account was £500m. This remained unchanged for the 2018 year of account.

MINT noted that it was currently undergoing the process of setting up its forthcoming venture on the Lloyd’s India platform where, subject to regulatory approval, capacity will be provided by the Syndicate. The Syndicate also said that it was “committed to working with Lloyd’s in response to the operational impact of Brexit. The Syndicate intends to make use of the proposed Brussels platform that is being established as part of Lloyd’s Insurance Company SA”.

Segmentally, Marine, Aviation and Transport GWP was £115.0m in 2017 calendar year, up from £100.8m the previous year. 2017 generated a total MAT loss of £24.67m, compared with a loss of £8.42m in 2016.