Syndicate results 2018 #44 Syndicate 2623 Beazley Furlonge

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 result for syndicate 2623 for the year ended December 31st 2018 was a profit of $98.2m, up from $88.6m the previous year.

The 2016 year of account declared a return on capacity of 12.2%. The 2017 year of account currently forecasted to close with a breakeven position. The 2018 year of account, which was still in its early stages of development, had been impacted by natural catastrophe losses, namely Hurricanes Florence and Michael, Typhoons Jebi and Trami, and the Californian wildfires.

The Syndicate said that the catastrophe loss activity during 2017 had a positive effect on the rating environment, with rates increasing by 3% in 2018 across the portfolio. This compared with an average decrease of 1% the previous year.

Most of Syndicate 2623’s lines of business saw increases in rates compared to 2017, with marine increasing by 3%, property increasing by 10%, reinsurance rates increasing by 6% and specialty lines increasing by 1%, although rates on renewals in the political, accident & contingency division decreased by 1%.

The syndicate’s combined ratio for 2018 was 96% (2017: 100%).

The natural catastrophes of 2018, with Hurricanes Florence and Michael as well as Typhoons Jebi and Trami and the Californian wildfires, all of which were major contributors to an increase in net insurance claims of $93.3m. These brought the 2018 total net insurance claims to $998.9m, up from $905.6m the previous year. The Syndicate said that the claims, while large, were not outside its expectation for such types of natural catastrophe.

The claims ratio for 2018 decreased to 58%, from 59% in 2017.

During 2018 there were prior year reserve releases of $110.0m, down from $176.9m the previous year. Marine releases were $12.5m in 2018, compared with $10.8m in 2017.

2018 was a difficult year for investments and many asset classes produced negative returns. However, the syndicate said that, while the absolute return was disappointing, most of the portfolio performed well relative to its benchmarks.

The syndicate’s risk profile has adjusted with the exit from the construction class of business within the property division and closing the office in Norway. which underwrote the syndicate’s energy class of business within the marine division.

In 2018, the syndicate’s business consisted of five operating divisions. Marine made up 13% in 2018 and 14% in 2017. The dominant sector is specialty lines, at 52% in 2018 and 51% in 2017.

Segmental information

2018 $mGPWClaims net of reinsurancetechnical resultCR
MAT278.5(132.5)18.394%
Total2178.4(998.9)71.496%

 

2017 $mGPWClaims net of reinsurancetechnical resultCR
MAT266.4(123.0)5.498%
Total1971.0(905.6)(2.1)100%

https://www.lloyds.com/investor-relations/financial-performance/syndicate-reports-and-accounts/2006/06/2623