The Lloyd’s syndicates have now published their results for 2020 and, in some cases, added detail and an outlook for 2021. Some have stuck to the bare bones. As was the case last year, IMN is summarizing the results from all syndicates that have a marine interest, which have provided some information on the marine side.
Hiscox Syndicate 33
Active underwriter Syndicate 33 – P A Lawrence
The result for Syndicate 33 in calendar year 2020 was a loss of $86.0m (2019: loss of $24.9m). Hiscox said that the syndicate’s 2020 results were materially impacted by Covid-19 losses, which totalled $209.0m net of reinsurance. The company said that this more than offset the impact of “a significant improvement in underlying profitability across insurance lines in particular”.
The Covid-19 losses primarily arose in the speciality division from contingency exposures.
Hiscox said that Covid-19 was “an unprecedented event for the insurance industry and the effects of it as a loss event remain both ongoing and uncertain. In measuring the liabilities the Syndicate has therefore included an allowance for risk and uncertainties above the best estimate.”
Results 2020/2019
| 2020 $m | 2019 $m | % | |
| Gross premiums written | 1,976.6 | 2,044.2 | (3.3) |
| Gross premiums earned | 2,003.3 | 1,958.0 | 2.3 |
| Net premiums earned | 1,018.0 | 968.0 | 5.2 |
| (Loss)/profit for the financial year | (86.0) | (24.9) | 245.4 |
| Claims ratio (%) | 72 | 68 | 4pp |
| Commission ratio (%) | 22 | 24 | (2pp) |
| Expense ratio (%) | 19 | 17 | 2pp |
| Combined ratio (%) | 113 | 109 | 4pp |
Divisional results 2020/2019
| Division | 2020 Gross premiums written $m | 2020 Profit/ (loss) $m | 2019 Gross premiums written $m | 2019 Profit/ (loss) $m |
| Reinsurance | 411.3 | (33.8) | 509.7 | (43.5) |
| Property | 532.2 | 16.5 | 569.5 | (39.0) |
| Aerospace and specialty | 331.9 | (107.3) | 342.6 | 20.5 |
| Marine and energy | 290.9 | 13.7 | 229.3 | 38.7 |
| Casualty | 347.8 | 27.9 | 320.3 | (20.4) |
| Art and private client | 62.5 | (3.0) | 72.8 | 18.8 |
| Total | 1976.6 | (86.0) | 2,044.2 | (24.9) |
Hiscox’s Marine and Energy division provides cover for marine hull, marine cargo, marine and energy liability and upstream energy risks.
Hiscox said that improving conditions in the marine hull and cargo markets gave rise to strong premium growth.
Upstream energy and marine liability remained competitive markets, reflecting the good returns that have been generated in these lines.
Hiscox said that the division was profitable in 2020 despite exposure to a number of large, single marine liability losses.
Looking ahead, Hiscox said that it saw opportunity for good growth in 2021 in classes where the strong stance taken by Lloyd’s over several planning cycles had positively and materially impacted pricing, terms and conditions.
“We expect to continue to take advantage of the improving market environment, while continuing to judiciously optimise the portfolio. Casualty lines in particular should see growth in 2021 on the back of substantial rate changes in 2020”, the syndicate said.
Syndicate 33 stamp capacity will stay flat for the 2021 year of account, at £1.7bn.
The Reinsurance Division includes marine and aviation reinsurance.
2020
| Division | Gross premiums written $000 | Gross premiums earned $000 | Gross claims incurred $000 | Net operating expenses $000 | Reinsurance balance $000 | Underwriting profit/(loss) $000 |
| Direct MAT | 212,270 | 187,363 | (190,025) | (51,133) | 47,524 | (6,271) |
| Direct Total | 1,548,519 | 1,521,563 | (1,204,995) | (369,241) | (50,765) ( | (103,438) |
| Reinsurance | 428,069 | 481,713 | (194,669) | (49,690) | (265,357) | (28,003 |
| Total | 1,976,588 | 2,003,276 | (1,399,664) | (418,931) | (316,122) | (131,441) |
2019
| Division | Gross premiums written $000 | Gross premiums earned $000 | Gross claims incurred $000 | Net operating expenses $000 | Reinsurance balance $000 | Underwriting profit/(loss) $000 |
| Direct MAT | 215,287 | 202,997 | (108,142) | (60,430) | (12,873) | 21,552 |
| Direct Total | 1,524,149 | 1,448,058 | (1,009,466) | (353,451) | (86,284) | (1,143) |
| Reinsurance | 520,031 | 509,946 | (773,311) | (36,842) | 225,008 | (75,199) |
| Total | 2,044,180 | 1,958,004 | (1,782,777) | (390,293) | 138,724 | (76,342) |
The Syndicate and its managing agent have no employees. Staff are employed by Hiscox Underwriting Group Services Limited (HUGS). The Syndicate did not directly incur staff costs during the year (2019: nil). The following salary and related costs were recharged during the year:
The active underwriter received the following remuneration charged as a Syndicate expense. 2020 $566,000, 2019 $665,000.
Wages and salaries 2020, $67.1m; 2019, $43.3m
Social security costs and pension costs (excluding provision for pension deficit); 2020, $35.8m; 2019, $6.74m.
The Directors of Hiscox Syndicates Limited received the following aggregate remuneration charged to the Syndicate and included within net operating expenses: 2020, $2.15m; 22019, $1.93m.