Lloyd’s syndicates marine results (10): AmTrust Syndicates Ltd Syndicate 1206

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.

AmTrust’s Lloyd’s platform, trading as AmTrust at Lloyd’s, combines AmTrust’s syndicate underwriting and managing agent operations.

During 2017 ASL managed Lloyd’s Syndicates 1861, 1206, 5820, 2526, 44 and 779 writing a globally diversified portfolio with 12 diverse lines of business.

Syndicate 1206 generated a loss for the year of £67.2m (2016: loss of £9.4m) before foreign exchange gains of £2.56m (2016: foreign exchange gains of £5.4m) taking the combined result to a loss of £64.7m (2016: loss of £4.05m).

The syndicate’s loss for 2017 was the combination of several factors including material exposure to hurricanes Harvey, Irma and Maria and the Mexico earthquakes, particularly on the Property account. The Syndicate’s reinsurance programme, including its participation on the group catastrophe programme, significantly ameliorated the impact. Net losses totalled $22.4m (£16.5m). These losses triggered reinstatements premium, with the acceleration of the earning of the catastrophe excess of loss protection further impacting the results.

Large loss activity on the Marine and Special Lines classes, and adverse attritional loss development on the Property and Marine lines further deteriorated the results.

Marine GPW in 2017 was £43.53m, up from £24.32m the previous year, out of £212.19m total in 2017, down from £237.85m in 2016.

Earned premiums in marine were £8.61m in 2017 and £2.44m in 2016.

Earned marine reinsurance premiums were £4.93m last year, up from £1.58m in 2016.

Earned reinsurance premiums increased by £15.6m in the year, following both the triggering of reinstatement premiums and the acceleration of the earning patterns on the Property account as a result of the Q3 catastrophe losses on hurricanes Harvey, Irma and Maria, as well as following growth in the gross earned premiums, particularly on the Marine account.

Gross incurred claims in marine in 2017 were £15.17m (£11.57m net) up from £3.71m gross claims in 2016 (£3.41m net).

Gross incurred claims overall increased by £108.5m during the year (£43.8m net), equating to a deterioration in the net incurred claims ratio of 27.9 percentage points, from 69.6% to 97.5%. By far the most significant driver of the increase in incurred claims was the Property account following hurricanes Harvey, Irma and Maria and the Mexico earthquakes,  in addition to claims arising from the Californian Wildfires and adverse attritional development.

However, large loss activity on the Marine and Special Lines classes, and adverse attritional loss development on the Marine book further deteriorated the claims ratio. Losses were partially offset by an improvement on the Liability class driven by the release of the 2016 Ogden margin as well as favourable claims development in the year.

In the segmental analysis, the underwriting result for marine, aviation & transport (MAT) for 2017 was GPW of £27.08m, gross claims of £28.80m, a reinsurance balance of minus £3.18m and an underwriting result of minus £12.66m.

This compared with MAT GPW of £27.32m in 2016, gross claims of £12.60m, a reinsurance balance of minus £2.08m, and an underwriting result of £5.48m.

For the syndicate as a whole, GPW in 2017 was £212.2m (2016: £237.85m). 2017 gross claims were £242.2m (2016: £133.6m). The underwriting result for 2017 was a loss of £74.24m (2016: loss of £19.26m).

Included within net claims incurred of £165.8m (2016:- £121.9m) was a deterioration of £11.5m (2016 – deterioration of £6.86m) to the claims reserves established at the prior year end, principally due to natural catastrophes and adverse attritional development in prior year reserves on the Property and Marine classes.

The Syndicate also acts a consortium leader, with ASL as the consortium manager, for a Marine Hull consortium participated upon by Syndicate 1861, another syndicate managed by ASL and whose capital is commonly provided by AmTrust Corporate Member Limited a subsidiary of AmTrust Lloyd’s Holdings Limited.