Syndicate Results 2020 #51 Syndicate 2488 Chubb

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 and CEO – JW Keen

With effect from January 1st 2019 Syndicate 2488 accepted the reinsurance to close of the liabilities of Syndicate 1882. Syndicate 1882 was also managed by CUAL and had been in run-off since December 31st 2016. The transaction resulted in the transfer to Syndicate 2488 of gross and net technical provisions of £150.2m and £135.0m respectively.

Syndicate 2488 reported net Covid-19 related losses of £28.3m for 2020, which it described as “a significant but manageable number in line with expectations for an event of this nature”. As December 31st 2020 paid and reported claims comprised only 15% of the net of reinsurance loss. The majority of the Covid-19 related loss has arisen from the Financial Lines class of business (59% of the net of reinsurance total) with smaller losses in Property (25% of the net of reinsurance total), Trade Credit (7%), Political Risks (4%) and Specialty Credit (4%).

The syndicate had minimal exposure to Covid-19 related UK Business Interruption losses and was therefore not directly impacted by the UK Supreme Court’s judgements on BI policy wordings.

The economic repercussions of the pandemic and the widespread uncertainty it has created prompted the syndicate to adopt a more cautious approach to underwriting in certain classes of business during 2020. As a consequence, premium income was lower than it would otherwise have been.

The Syndicate note din its report that the London insurance market experienced premium rate increases across a broad range of business classes in 2020, with more significant rate increases being seen as the year progressed. The largest increases for the syndicate were in the Financial Lines, Aviation, Marine and Property classes of business.

Although the syndicate’s underwriting result in 2020 was negatively impacted by losses arising from the Covid-19 global pandemic and other natural catastrophe events, the full impact of these events was partly offset by prior period reserve releases. The 2020 underwriting profit was £9.3m (2019: £24.2m) representing a combined ratio of 97.6% (2019: 93.6%). The underwriting profit benefited from a prior period reserve release of £31.5m, up from £4.6m the previous year.

The combined ratio excluding the prior period reserve releases was 105.6% (2019: 94.8%). This included 7.2% for Covid-19 related losses (2019: 0%) and 12.4% for other catastrophe events (2019: 2.7%). The cat losses were principally hurricanes Sally, Zeta and Laura, which struck the US in the third and fourth quarters of 2020. Gross written premiums of £528.3m in 2020 were 8.2% higher than the prior year. The Syndicate said that the growth in 2020 reflected the continued increases in premium rates and increased underwriting opportunities. It said that the growth would have been greater had CUAL not adopted “a more cautious approach to underwriting in the first half of the year in response to the social and economic uncertainties brought on by the Covid-19 pandemic and national lockdowns around the world”. Growth was strongest in the Property, Marine and Financial Lines classes of business.

Overall Syndicate 2488 generated a total return of 5.1% in 2020 (2019: 5.7%) on balances available for investment.

KPIs £m 2020 2019
GPW 528.3 488.2
NPW 420.6 387.0
CR 97.6% 93.6%
Profit 87.8 101.7


2020 £000s GPW GPE GCI Op exps Reins Bal
Direct MAT 88,029 76,210 (48,435) (23,038) (361)
Reinsurance 115,507 113,555 (82,519) (22,308) (8,275)
Grand Total 528,252 499,139 (384,182) (140,553) 34,909
2019 £000s GPW GPE GCI Op exps Reins Bal
Direct MAT 56,905 56,472 (32,687) (20,835) 1,952
Reinsurance 119,534 114,501 (65,579) (18,428) (26,652)
Grand Total 488,175 481,008 (268,853) (151,906) (36,050)

Emoluments & Benefits

£ 2020 2019
Active Underwriter 94,988 646,455
Highest-paid director 1,018,176 931,843