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 – Miriam Goddard
The 2020 calendar year GAAP result was a loss of $131.7m, compared with a profit of $23.4m the previous year. The combined ratio was 171.5% (2019: 87.9%). The Covid-19 pandemic had wide-ranging impacts across multiple underwriting years, primarily on Contingency business. Excluding Covid-19-related losses and associated reinsurance premiums and recoveries the Syndicate result would have been a profit of $29.5m, with a combined ratio of 88.1%.
|KPIs ($m) Financial year||2020||2019||2018||2017||2016||2015||2014|
|Gross premium written ($m)||417.5||335.4||254.5||222.4||229.4||213.2||246.7|
|Net premium written ($m)||168.5||203.0||162.5||129.6||180.9||181.4||207.9|
|Net premium earned ($m)||184.4||179.3||155.7||138.1||175.5||192.1||188.8|
|Net claims ratio (%)||129.1||51.5||66.5||98.0||71.9||56.0||53.4|
|Acquisition expense ratio (%)||21.6||18.7||21.9||29.7||28.2||25.6||27.1|
|Admin expense ratio (%)||20.8||17.7||21.9||23.2||17.5||14.2||13.3|
|Net combined ratio (%)||171.5||87.9||110.3||150.9||117.6||95.8||93.8|
|Cash and investments ($m)||223.9||147.9||112.9||105.6||132.1||141.6||144.1|
|Profit / (Loss) for financial year ($m)||(131.7)||23.4||(16.4)||(69.8)||(26.6)||8.9||10.9|
|Pure underwriting year||2020 F’cast||2019 F’cast||2018 F’cast||2017 Actual||2016 Actual||2015 Actual||2014 Actual|
|Lloyd’s stamp capacity ($m)||444.3||298.1||286.6||304.4||278.0||277.0||304.6|
|Stamp gross premium written ($m)||402.4||304.7||252.1||240.1||239.9||197.9||211.4|
|Profit / (Loss) for underwriting year ($m)||(69.1)||(48.6)||(12.3)||(35.3)||(35.6)||1.9||(2.6)|
|Return on capacity (%)||(15,6)||(16.3)||(4.3)||(11.6)||(12.8)||0.7||(0.9)|
WR Berkley Syndicate 1967 took action to cease underwriting in non-performing classes in 2019. The Syndicate exited the Asset Protection and Accident and Health classes of business; it did not believe that a sustainable cross cycle return was achievable.
In July 2018 the Syndicate had exited from the Aviation class of business, and in 2017 the Syndicate had exited the Marine class of business.
In response to the impact of Covid-19 the Syndicate significantly reduced its participation in the Event Cancellation and Trade Credit business, which sat within the Crisis Management class.
The Lloyd’s stamp capacity for 2020 was £325.0m, up from £225.0m the previous year. The capacity for 2021 underwriting year rose again, to £350m.
The 2018 Year of Account closed on December 31st 2020 with a loss of $12.3m. Catastrophe losses of $14.5m, primarily from Hurricanes Florence and Michael, affected the result for the year. There was adverse development on Crisis Management lines, with $2.6m of Covid-related losses during the 2020 calendar year.
The 2019 underwriting year experienced considerable adverse development in 2020. Premium written continued to show positive growth in key classes and encouraging rate performance. However, significant losses arising from Covid-19 – $81.6m – had contributed to a forecast $48.6m loss on the year, and $52.1m losses incurred during 2020. These losses had been capped through a loss portfolio transfer agreement entered into with Berkley Insurance Co.
The performance of the 2020 underwriting year was significantly affected by the Covid-19 pandemic.
The Syndicate achieved rate improvements and underwrote new business in core classes. There was particularly strong growth in Commercial Property and Specialty Casualty business.
The forecast result for the year was a loss of $69.1m, driven primarily from $71.4m in net losses arising from the Covid-19 pandemic, particularly on the Contingency class. These losses from the Contingency class are also now capped through a loss portfolio transfer agreement entered into with Berkley Insurance Co.
The syndicate said that 2021 presented “an opportunity to capitalize on careful cycle management over recent years with the development of a strong core book and recent rate improvements expected to continue”.
It added that the syndicate was “well-placed to take advantage of hardening market conditions and opportunities to target profitable growth in key classes through its increased capacity in the 2021 year”.
|Gross premium written ($000s)||2020||2019||2018|
|Run-off (Aviation, Marine A+H & Asset Protection)||(3,700)||15,204||31,065|
|2020 $000s||GPW||GPE||GCI||Op Exps||Reins. Bal||Total|
|Energy – Marine||240||305||(138)||(70)||(96)||1|
|2019 $000s||GPW||GPE||GCI||Op Exps||Reins. Bal||Total|
The Active Underwriters received $326,000 total remuneration in 2020 and $318,000 in 2019, which was charged to the Syndicate by way of the Secondment and Services Agreement.