Lloyd’s Syndicate Results 2017 (48): Tuesday Canopius Syndicate 4444

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.

In 2017 Syndicate 4444, Active Underwriter M P Duffy, recorded a loss of £182.3m, compared with a gain of £3.0m in 2016. The combined ratio rose to 120%, from 101% the previous year

The net catastrophe losses were:

Mexico Earthquake£10.3m
California Wildfire£32.5m

Gross written premiums increased by 7.0% to £1,138.1m (2016: £1,063.9m). The investment return was £12.6m, up from £10.4m the previous year.

The main drivers of the 2017 result were:

  • Catastrophe event net losses of £200m from hurricanes Harvey, Irma and Maria, the Mexican earthquake and Californian wildfires;
  • A strengthening of prior period reserves;
  • A three percentage point improvement in the expense ratio, benefiting from the restructuring programme in the prior year;
  • The partial recovery of the value of Sterling against the US Dollar.

Canopius said that the results were “reflective of the challenging year faced by the market as a whole”, noting that. 2017 was expected to be “the third-most expensive year for insured losses in history and, despite these significant losses, rate pressures continued throughout the year.”

Canopius said that rate increases resulting from the exceptional loss activity had been smaller than initially expected, with “a continued excess of capacity” dampening the effect in the January 2018 renewal season. “As such, 2018 is expected to be a challenging year”, the Syndicate said. However, Canopius noted that an organizational restructure was now yielding benefits, with a marked reduction in the expense ratio.

 2017 £m2016 £m
Investment return12.610.4
Investment return1.4%1.2%
Combined ratio119.8%101.1%

For 2018 the syndicate capacity increased to 1,048m.

On March 9th 2018 Sompo Holdings sold its interest in the Canopius Group, including Canopius Managing Agents (CMA) to a private equity consortium led by Centerbridge.

Segmentally, Marine and Energy GWP for 2017 was £85.24m, out of a direct insurance total GWP of £792.98m. Marine and Energy booked a loss of £2.56m, with total direct insurance reporting a loss of £151.8m.

For 2016, Marine and Energy recorded GWP of £75.15m for a loss of £5.46m. Total direct insurance GWP for 2016 was £1,064m, recording a total loss of £8.55m.

Marine and Energy booked a favourable reserve release for £7.34m in 2017 and £8.23m in 2016. For 2017, total reserves deteriorated by £23.29m, while for 2016 the total reserve release was £18.88m.