Syndicate results 2018 #28 Syndicate 1955 (Barbican)

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.

The principal activity of Syndicate 1955 (Barbican, Active Underwriter A Caldwell) is the transaction of general insurance and reinsurance business in the Marine, Property, Financial Lines and Accident & Health and Casualty classes. The result for calendar year 2018 was a loss of £10.0m (2017: loss of £13.4m).

The Syndicate said that, despite the various catastrophes during 2017 and 2018, the rating environment had only improved moderately.

In this context, the Syndicate said that it examined marginal and loss-making classes of business, with a view to improving return on capital. In so doing it decided to exit Marine Insurance, Aviation, Professional Indemnity, Facilities and Property Insurance for the 2019 year of account. “This re-positioning has enabled the Syndicate to focus on and potentially grow profitable miscellaneous specialty insurance classes, both short and long-tail; these include Healthcare, Cyber, Management Liability and Malicious Acts, where demand for insurance is increasing and market capacity is more limited than standard Property and Casualty lines”, the syndicate said.

£m201820182018201720172017
GPW434.0434.0444.5444.5
GPE442.7442.7433.4433.4
NPE301.9(175.8)126.1317.4(116.0)201.4
Net claims(202.6)151.7(50.9)(232.3)115.0(117.3)
(Loss)/profit for the year(23.1)13.1(10.0)(28.3)14.9(13.4)
Net Claims ratio67.1%86.3%40.4%73.2%99.1%58.2%
Net Expense ratio41.7%21.2%70.3%36.9%14.6%49.8%
Net Combined ratio108.8%107.5%110.6%110.1%113.7%108.0%

During 2018, in line with the terms of the 2016 YoA QS contract with 1856, the Syndicate ceded 15.4% of its whole account technical reserves on the 2015 and prior years of account. The accounting treatment for this transaction, whilst having nil impact on the loss for the year caused the Retained combined ratio to increase from 108.0% to 110.6%.

For 2018 the Syndicate underwrote with an authorized capacity base of £321.6m (2017: £317.1m). As part of an overall Group strategic initiative to manage capital, the Syndicate underwrites both for the retained capital account provided by the Barbican Group and third party investors who support the overall Syndicate underwriting via SPAs also managed by the Agency.

The MAT division encompasses Marine Reinsurance and Marine Insurance lines of business. It also includes General Aviation and Aerospace, Terrorism and Political Risk. In 2018 MAT generated GWP of £127.7m (2017: £145.7m). The reduction from prior year was driven by Marine Insurance, which was exited by the Syndicate part-way through the year.

The Syndicate said that it continued to experience difficult trading conditions, with a soft rating environment persisting on most lines of business. The Syndicate experienced some significant large and catastrophe losses as well as heavy attritional claims, especially within the Marine, Property and Energy books, which significantly impacted the result.

2018 £mGPWGPEGross claimsOperating ExpensesReinsurance BalanceTotalNet technical provisions
Direct Energy Marine20.724.1(11.8)(5.6)(7.0)(0.3)4.3
MAT34.045.1(52.5)(16.1)11.8(11.7)29.4
Total direct257.8269.2(192.9)(79.1)(13.9)(16.7)184.8
Reinsurance176.2173.5(117.3)(26.8)(26.1)3.3191.4
Total434.0442.7(310.2)(105.9)(40.0)(13.4)376.2

 

2018 £mGPWGPEGross claimsOperating ExpensesReinsurance BalanceTotalNet technical provisions
Direct Energy Marine22.114.7(15.7)(4.3)4.5(0.8)20.0
MAT46.457.5(71.5)(17.5)17.4(14.1)42.2
Total direct265.0263.0(233.8)(70.3)23.7(17.4)240.8
Reinsurance179.5170.4(135.1)(29.9)(4.1)1.3162.9
Total444.5433.4(368.9)(100.2)19.6(16.1)403.7

https://www.lloyds.com/investor-relations/financial-performance/syndicate-reports-and-accounts/2011/03/1955