Syndicate results 2018 #30 Apollo Syndicate 1969

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.

At Apollo Syndicate 1969 (Active Underwriter NG Jones ) the Marine Liability element of the Marine & Energy Liability class comprises Protection & Indemnity, Charterers, Vessel Pollution, Ports and Terminals, Shipyards, and other risks associated with cargo storage and transportation. The Energy Liability element of the class mainly insures onshore and offshore Exploration and Production (E&P) operators and associated field contractors.

Apollo said that the class had continued to grow in 2018, seeing benefits from the development of the Marine Hull class, and also positive synergies working alongside the Energy account.

Apollo “modestly” broadened the number of insureds in the P&I club segment of the class, stating that it continued “to seek a better balance to the account by managing our attachment points and monetary line sizes”.

Apollo accepted that this had been a challenge due to the relatively weak rating environment, but said that the syndicate was seeing small rate rises in 2019, following on from modest improvements in 2018. A consortium had been in place since 2016 and had been renewed for 2019, with continued strong support. The key focus of the Marine Hull class had been to emphasise risk selection and diversification across market segments, whilst maintaining a cautious approach, Apollo said, adding that the account was well balanced, with the largest sectors being brown water, blue water and offshore.

The class had continued to grow in 2018 as rates had begun to harden gently following a number of underwriters withdrawing from the Hull market. “We are well positioned to take advantage of any significant market hardening in 2019. We still consider this class offers attractive long-term opportunities”, said Apollo.

The plan for 2019 is to underwrite $660m of premium income (net of commission) (£500m at the planning foreign exchange rate of £1:$1.32). The principal area of growth is in the ibott Rover class, supported by the launch of Syndicate 1971. The class is underwritten by Syndicate 1969, which cedes 80% under a quota share reinsurance to Syndicate 1971. The account is further protected by a 50% quota share with an external reinsurer. The total stamp capacity of Apollo for 2019 is $567.6m (£430.0m).

Apollo said that it had taken further steps to address areas of the accounts that had underperformed, primarily in the Property D&F and Specie & Cargo accounts. Premium income for these classes has reduced for 2019. The classes were predominantly renewal books on which the Syndicate had assumed little improvement in pricing. However, “to date we are in fact seeing rates increasing more than we have planned”, Apollo said.

The Cargo element of the Specie & Cargo class has materially reduced for the 2019 plan, to $2.8m of premium income. The account will focus on six subclasses that themselves have a historically profitable track record.

 

2018 $000Gross premiums writtenGross premiums earnedGross claims incurredGross operating expenseReinsurance balanceTotal
Direct Marine, aviation and transport44,12743,875(34,661)(11,967)2,78229
Total Direct269,456270,776(311,182)(73,470)59,503(54,373)
Reinsurance146,765107,827(98,986)(30,808)15,389(6,578)
Total416,221378,603(410,168)(104,278)74,892(60,951)

 

2017 $000Gross premiums writtenGross premiums earnedGross claims incurredGross operating expenseReinsurance balanceTotal
Direct Marine, aviation and transport25,63825,218(17,256)(7,364)(1,091)(493)
Total Direct236,211232,344(229,537)(67,852)11,229(53,816)
Reinsurance65,29164,222(93,756)(18,755)12,248(36,041)
Total301,502296,566(323,293)(86,607)23,477(89,857)

Years of Account:

For 2016 a new Marine & Energy Liability class underwriter with a historically profitable track record was recruited. When developing the original plan for Energy in 2013 it had always been the intention to broaden the product offering to establish a presence in the Energy Liability market. In addition to Energy Liability this class also covers Marine Liability business which sits well with our existing Specie & Cargo account.

For 2017 A new Marine Hull underwriter with historically profitable track record was recruited to the syndicate late in 2016 to enable the marine offering to be expanded for the 2017 year of account. In addition the Marine & Energy Liability class underwriter recruited in 2016 was able to write for the full year.

https://www.lloyds.com/investor-relations/financial-performance/syndicate-reports-and-accounts/2016/1969