Syndicate results 2018 #61 Syndicate 5151 Endurance/ Sompo International

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. This is the last in the series for this year.

KPIs

£m 2018 2017 Change
Gross Written Premiums 358.1 318.7 12.4%
Net Earned Premiums 148.6 121.8 22.0%
Net Claims Incurred (91.3) (93.4) (2.3%)
Expenses (68.2) (65.9) 3.4%
Underwriting Result (10.9) (37.5)  
Investment return 2.0 0.7 170.6%
Balance on technical account (8.9) (36.8)  
Unrealised foreign exchange (loss)/gain (0.3) 3.3  
Loss for the financial year (9.2) (33.5)  
Claims ratio 61.5% 76.7% (15.2%)
Expense ratio 45.9% 54.1% (8.2%)
Combined ratio 107.4% 130.8% (23.4%)

Gross written premiums increased by 12.4% from £318.7m in 2017 to £358.1m in 2018. This increase was predominately from the Insurance book; the most significant growth was in Specialty lines (£26.0m) and Professional lines (£12.4m).

The Syndicate generated an underwriting loss of £10.9m for the year (2017 – £37.5m loss), representing a combined ratio of 107.4% (2017 – 130.8%). After the addition of investment returns and foreign exchange the overall result for 2018 is a loss of £9.2m (2017 – loss of £33.5m).

The Syndicate benefitted from positive development on prior accident year claims reserves of £11.1m (2017 – £17.3m) across all lines of business, as a result of lower than expected claims development.

2018 losses emanating from Hurricanes Florence and Michael generated gross incurred claims of £12.9m to the Syndicate and £7.4m net after ceded reinsurance. The Syndicate was also affected by the Marine Project Sassi loss that was a £18.1m gross loss and £1.5m net of ceded reinsurance.

Favourable prior accident year claims development of £11.1m (2017 – £17.3m) was experienced in 2018, spread across all lines of business, as a result of lower than expected claims development.

The Syndicate said that the 2019 Syndicate Business Forecast (“SBF”) to Lloyd’s was “a particularly challenging process” The Syndicate’s 2019 SBF was submitted with planned gross written premium of £307.8m (2018 – £370.6m).

The Syndicate noted that that the Q4 2018 QMB estimates 2018 YOA gross written premium to be £333.7m and so the 2019 SBF presents a reduction in GWP of 8%. “This will require careful monitoring throughout 2019 and a regular dialogue with Lloyd’s on areas where the Syndicate expects to be able to grow with evidenced profitability.”

Segmental information

2018 £’000 Gross written premiums Gross premiums earned Gross claims incurred Gross operating expenses Reins. Bal Total
Direct Marine* 14,006 12,990 (23,175) (3,187) (1,162) (1,045)
Direct energy marine 3,479 3,675 (947) (576) (1,844) 308
Total Direct 265,471 226,131 (173,698) (51,410) (17,735) (16,712)
Total inc reinsurance 358,148 318,495 (223,207) (68,160) (38,023) (10,895)

*Sompo Intl books aviation and transport separately.

https://www.lloyds.com/investor-relations/financial-performance/syndicate-reports-and-accounts/2016/5151 l