Syndicate results 2019 #13 Talbot (an AIG company) Syndicate 1183

Acting CEO David Morris

The Lloyd’s syndicates have now published their results and, in some cases, added detail and an outlook for 2020. 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 Syndicate 1183 the result for the year was a profit of $89.4m, compared with a loss of $63.7m in 2018. This was mainly driven by an increase in premium in targeted classes, a more favourable claims experience, an improved investment return and an improvement in operating expenses.

Premiums rose modestly, by $35.2m to $985.7m.

Claims incurred after reinsurance recoveries were $432.1m, down $86.7m year on year. Large losses were roughly comparable with 2018, notably including events in Hong Kong and Chile, a shipyard crane collapse and a refinery explosion.

The investment return rose by $33.8m to $51.5m. Operating expenses declined by $16.6m to $296.4m.

The combined ratio fell to 94.6%, from 111.4% in 2018.

The syndicate capacity for 2020 is £650m. Acting CEO David Morris said that “we expect to see a continuation of pricing improvements in 2020”.

Results for the financial year ($m) 2019 2018 2017 2016 2015
Gross premiums written 985.7 950.5 921.1 970.7 1,018.8
Net premiums written 791.7 749.9 721.6 795.0 819.9
Net earned premiums 769.8 746.6 742.1 774.4 832.6
Net claims incurred (432.1) (518.8) (505.7) (430.9) (355.9)
Net acquisition costs (181.9) (178.4) (182.7) (188.9) (200.7)
Underwriting result before administrative expenses 155.8 49.4 53.7 154.6 276.0
Administrative expenses (114.5) (134.6) (136.9) (138.3) (156.0)
Investment return 51.5 17.7 18.4 18.2 12.3
Foreign exchange gains/(losses) (0.4) 3.8 (3.3) 14.6 (2.2)
Profit/(loss) for the financial year 89.4 (63.7) (68.1) 49.1 130.1
Key performance indicators 2019 2018 2017 2016 2015
Claims ratio (%) 56.1 69.5 68.1 55.6 42.7
Expense ratio (%) 38.5 41.9 43.1 42.3 42.8
Combined ratio (%) 94.6 111.4 111.2 97.9 85.5

Gross premiums written by class of business ($m)

  2019 2018 2017 2016 2015
Marine 226.6 218.5 226.8 246.0 302.9
Political Risk 102.5 99.4 82.3 78.6 76.4
Political Violence and War 124.8 106.4 113.2 113.0 111.0
Property 289.0 295.6 256.2 276.9 281.4
Specialty 149.0 152.7 148.4 156.4 141.0
Treaty 93.8 77.9 94.2 99.8 106.1
Total gross premiums written 985.7 950.5 921.1 970.7 1,018.8

The majority of the syndicate’s insurance and reinsurance business classes experienced increased pricing for 2019. Rates charged for renewal business were up 9.1% in 2019, compared with a .2% increase in 2018.

Political violence and War showed the most significant increase, with GWP up by $18.4m to $124.8m. The property class ceased underwriting Construction business in 2019, contributing a $17.9m decline. Excluding this, property written premium was up by $11.4m year on year.

The net claims ratio fell to 56.1%, from 69.5% in 2018. This was primarily due to better attritional loss experience across a number of classes, but notably Cargo, Marine Hull and Property Lineslips. This followed remediation work undertaken in 2018.

2019 $m Gross premiums written Gross premiums earned Gross claims incurred Gross operating expenses Reinsurance balance Total
Direct Marine 48.3 49.9 (42.8) (21.7) (1.1) (15.7)
Energy – marine 37.5 37.3 (16.0) (11.0) 0.3 10.6
Total direct 568.4 563.0 (313.1) (195.1) (43.5) 11.3
Reinsurance business 417.3 414.5 (276.6) (123.2) 15.3 30.0
Total 985.7 977.5 (589.7) (318.3) (28.2) 41.3
2018 $m Gross premiums written Gross premiums earned Gross claims incurred Gross operating expenses Reinsurance balance Total
Direct Marine 47.2 49.9 (51.6) (22.2) 8.6 (15.3)
Energy – marine 36.5 35.5 5.6 (11.6) (18.5) 11.0
Total direct 553.5 521.9 (382.0) (200.8) (21.1) (82.0)
Reinsurance business 397.0 419.4 (245.2) (136.4) (41.0) (3.2)
Total 950.5 941.3 (627.2) (337.2) (62.1) (85.2)

https://www.lloyds.com/investor-relations/financial-performance/syndicate-reports-and-accounts/2006/06/1183