The Lloyd’s syndicates have now published their results and, in some cases, added detail and an outlook for 2021. As in the past three years, IMN is summarizing the results from all syndicates that have a marine interest which have provided some information on the marine side.
Active Underwriter S Low (resigned October 1st 2020)
Active Underwriter R Merrett (appointed November 18th 2020).
| KPIs £m | 2020 | 2019 |
| GWP | 144.5 | 175.4 |
| GPE | 169.0 | 206.7 |
| NPE | 136.0 | 142.1 |
| Inv inc. | 3.2* | 5.8 |
| P/L | (21.7) | (32.5) |
| CR | 120.0% | 130.6% |
*Investment income comprised realized gains of £0.3m (2019: 0.9m), unrealized gains £1.8m (2019: £3.0m) and investment income £1.1m (2019: £1.9m)
2020 events
The Syndicate (now in run-off) underwrote a mixture of Marine, Property, Casualty, Reinsurance, and Specialty lines of business.
The Marine segment underwrote H&M, Marine and Energy Liability, Cargo, War, Transport Liabilities , Offshore Energy and Specie & Fine Art.
During a strategic review in H2 2018 it was decided to exit Aviation products and airlines, excess casualty, power & utility, direct & facultative property, construction, healthcare, yacht and shipbuilding. These lines were put into run-off in 2019.
On June 10th 2020 Enstar Group announced that they were placing StarStone International operations, including Syndicate 1301, into an immediate and orderly run-off. A run-off plan for the Syndicate was prepared and submitted to Lloyd’s on August 14th 2020 and an orderly run-off of the 2020 and prior underwriting years has been managed since the announcement.
On November 17th 2020 Inigo Ltd agreed to purchase from Enstar, StarStone Underwriting Ltd – including the participation on Lloyd’s Syndicate 1301. This was to enable Inigo to start writing a new portfolio of insurance and reinsurance risks for the 2021 underwriting year.
The Inigo transaction is subject to completion and regulatory approval.
On December 2nd 2020 Syndicate 2021 SBF and authority to underwrite was approved in principle by the Lloyd’s Council. In addition, Inigo Corporate Member Ltd was subsequently approved and Funds at Lloyd’s provided to satisfy the new member capital requirement.
For 2021, Inigo has commenced underwriting a portfolio of Reinsurance, Property and Casualty business under a new management team.
The Syndicate stamp capacity for the 2021 year of account is £270m. For 2020 Starstone’s underwriting capacity was £185.8m.
For the 2020 years of account and prior, SGL No. 1 Ltd is the corporate member and capital provider. SGL1 No. 1 is a corporate member within the Enstar Group and is also the corporate member for Syndicate 2008.
As part of the Inigo transaction, the management of 2020 and prior years will be novated to another managing agency (Enstar Managing Agency Ltd, subject to approval) and these years will be eventually reinsured to close into Syndicate 2008.
Result
The result for the 2020 financial year was a loss of £21.7m (2019: £32.5m loss) with a combined ratio of 120.0% (2019: 130.6%). This included Covid-19 losses and increased expenses following the decision by Enstar Group to place the Syndicate’s 2020 and prior underwriting years into run-off.
GWP in 2020 dropped to £144.5m, from £175.4m in 2019, due to the cessation of underwriting mid-way through the year. The Syndicate’s claims ratio of 71.4% (2019: 86.8%) included COVID-19 losses, primarily relating to contingency for the Personal Accident Treaty line of business.
The Syndicate’s expense ratio deteriorated to 22.2% (2019: 13.2%). This ratio included 6pp relating to restructuring expenses incurred following the run-off decision.
The non-technical account included an FX gain of £2.3m (2019: £5.2m).
The Syndicate reported an investment return of £3.2m (2019: £5.8m) for the financial year. This comprises realised gains of £0.3m (2019: 0.9m), unrealised gains £1.8m (2019: £3.0m) and investment income £1.1m (2019: £1.9m). The Syndicate’s return is mainly from the fixed Income portfolio, which primarily comprises corporate and government bonds.
Covid-19
The Syndicate’s ultimate loss estimate at 31 December 2020 is £71.6m gross and £21.7m net of reinsurance and including reinstatement premiums, primarily in its Accident and Health, Personal Accident Treaty and Credit Risk lines of business.
Sectors
| 2020 £000s | GPW | GPE | GCI | Op exps | Reins Bal | Total |
| Direct MAT | 29,807 | 37,793 | (21,464) | (13,790) | (3,394) | (855) |
| Total Direct | 90,303 | 103,454 | (89,340) | (38,351) | 10,144 | (14,093) |
| Reinsurance | 54,175 | 65,506 | (63,972) | (27,685) | 13,104 | (13,047) |
| Grand Total | 144,478 | 168,960 | (153,312) | (66,036) | 23,248 | (27,140) |
| 2019 £000s | GPW | GPE | GCI | Op exps | Reins Bal | Total |
| Direct MAT | 39,698 | 50,578 | (48,995) | (15,907) | 1,622 | (12,702) |
| Total Direct | 100,213 | 129,303 | (140,517) | (36,199) | 9,679 | (37,734) |
| Reinsurance | 75,192 | 77,352 | (48,871) | (25,996) | (8,160) | (5,675) |
| Grand Total | 175,405 | 206,655 | (189,388) | (62,195) | 1,519 | (43,409) |
Emoluments
In 2020 the active underwriter received aggregate remuneration of £201,000 (2019: £214,000).