Syndicate results 2018 #23 Chubb Syndicate 1882

The Lloyd’s syndicates have now published their results and, in some cases, added detail and an outlook for 2019. As last year, IMN is summarizing the results from all syndicates that have a marine interest which have provided some information on the marine side.

Chubb Ltd, the ultimate parent of CUAL, is a Switzerland-incorporated holding company for the Chubb Group of Companies. Chubb Ltd and its direct and indirect subsidiaries, collectively the Chubb Group of Companies, are a global insurance and reinsurance organisation. The company maintains executive offices in Zurich, New York, London and other locations, and employs approximately 32,700 people worldwide.

Chubb operated two Lloyd’s syndicates during 2018: Syndicate 2488 and Syndicate 1882, both managed by CUAL. CUAL assumed the management of Syndicate 1882 from Chubb Managing Agency Limited (CMAL) through a Deed of Novation of the Managing Agent Agreement on September 30th 2016, with the transfer of assets and business effected on October 12th 2016, on which date the renewal rights to Syndicate 1882’s business were transferred to Syndicate 2488’s capital provider, Chubb Capital I Ltd.

Syndicate 1882 formally ceased to trade on December 31st 2016 and CUAL agreed terms to reinsure to close the liabilities of Syndicate 1882 into Syndicate 2488’s 2017 year of account, with effect from January 1st 2019. The reinsurance to close transaction results in the transfer to Syndicate 2488 of gross and net technical provisions of £150.2m and £135.0m respectively.

Since December 31st 2016 the conduct of the syndicate’s run-off has been overseen by the Run-Off Manager and a run-off committee.

£m20182017
Gross premiums written(1.9)9.3
Net premiums written(2.6)5.2
Combined ratio (52.3%)137.8%
Profit/(loss) for financial year9.0(10.1)

* Premiums written in 2017 and 2018 relate to adjustments made in the year to the premium for contracts entered into prior to 2017

The syndicate focused on writing third party liability, transport (cargo) and marine business. Both direct and reinsurance assumed marine business was written.

The syndicate purchased reinsurance to mitigate the impact of major events and an undue frequency of smaller losses. In 2016, post-acquisition, additional reinsurance protection was purchased to bring retentions and accumulations more in line with other operating companies within the Chubb Group. The net loss ratio was high at 203.2% (2017: 99.0%) driven by several new large losses and by the absence of new written premiums and negative adjustments to premiums for contracts underwritten in prior years.

Prior period reserve deterioration was £5.2m (2017: deterioration of £10.8m) primarily due to adverse experience on third party liability.

Expenses reduced significantly after January 1st 2017 mostly because of decreasing earned premium but also from the synergies of running Syndicate 1882 alongside Syndicate 2488, plus a general reduction in activity after the syndicate ceased underwriting.

2018 £000Gross premiums writtenGross premiums earnedGross Claims IncurredGross Operating ExpensesReinsurance balance
Direct Marine, aviation and transport(1,715)386(1,076)(26)(110)
Reinsurances acceptances(1,010)1,6451,224(370)(438)
Total(1,880)7,094(12,389)(715)(181)

 

2017 £000Gross premiums writtenGross premiums earnedGross Claims IncurredGross Operating ExpensesReinsurance balance
Direct Marine, aviation and transport(879)8,5291,9183,012190
Reinsurances acceptances6,55219,13410,9703,811(3,415)
Total9,25240,82032,70510,994(7,747)

Movement of provisions in MAT was negative £921,000 in 2018, positive £3.10m in 2017.

Total movement in provisions was negative £5.18m in 2018 and negative £10.76m in 2017.

https://www.lloyds.com/investor-relations/financial-performance/syndicate-reports-and-accounts/2011/03/1882