Syndicate results 2021 #1 Hiscox 33

The Lloyd’s syndicates have now published their results for 2021 and, in some cases, added detail and an outlook for 2022. Some have stuck to the bare bones. 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.

Hiscox Syndicates Limited (HSL) is the managing agent of composite Syndicate 33, aligned Syndicate 3624 and Special Purpose Arrangement (SPA) 6104. HSL is an indirectly wholly owned subsidiary of Hiscox Ltd.

CEO is Hamayou Akbar Hussain

Active underwriters are:

  • Syndicate 33 – P A Lawrence
  • Syndicate 6104 – A Dolphin

The result for Syndicate 33 in calendar year 2021 was a profit of $193.8m (2020: loss of $86.0m). The 2021 results were significantly improved from 2020, with an absence of any further material Covid-19 losses. Hussain said that The Syndicate had been able to take advantage of rate rises and rely on its recent underwriting actions to deliver a balanced and materially-improved profit, “despite having to weather a number of large storm events and strong head wins in the bond market in the latter half of the year delivering mark-to-market losses”.

KPI

$m 2021 2020 % change
Gross premiums written 2,056.1 1,976.6 4.0
Gross premiums earned 2,039.9 2,003.3 1.8
Net premiums earned 1,099.0 1,018.0 8.0
Total recognised profit/(loss) for the year 193.8 (86.0) 325.3
Claims ratio (%) 48 72 (24)
Commission ratio (%) 19 22 (3)
Expense ratio (%) 16 19 (3)
Combined ratio (%) 83 113 (30)

Divisional performance

$m 2021 GPW 2021 profit/(loss) 2020 GPW 2020 profit/(loss)
Reinsurance 427.0 77.4 411.3 (33.8)
Marine and energy 288.0 27.7 290.9 13.7
Art and private client 58.5 19.2 62.5 (3.0)
Total 2,056.1 193.8 1,976.6 (86.0)

In the Marine and Energy division, which provides cover for marine hull, marine cargo, marine and energy liability and upstream energy risks, Hussain said that upstream energy remained a competitive market, reflecting the good returns that have been generated here over time Meanwhile the other lines had experienced favourable conditions and rate movement over the last few years. The division was profitable in 2021, despite exposure to a number of large marine liability and upstream energy losses.

In art and private client, which includes the fine art account written in Lloyd’s (together with a small number of binding authorities specialising in the insurance of high-value houses, including stately homes, in the UK), a healthy profit was returned as lockdown restrictions eased and allowed for gatherings such as art exhibits to go ahead.

In Reinsurance, which includes marine and aviation reinsurance, the Syndicate underwrites business for its own account and for third-party capital providers whether they are insurance companies, other syndicates (in particular Syndicate 6104) and capital market investors. The division experienced modest gross and more meaningful net premium growth during the year, with Hiscox taking advantage of “the best rating environment seen in years”. Despite significant catastrophe events seen during the year, the division delivered a strong net underwriting result. It said that, action taken to re-underwrite the division’s book had resulted in improved attritional performance and a better performing risk book. In addition, releases had been seen on older year catastrophe losses.

Looking ahead, Hussain said that “we see opportunity for good growth in 2022 in classes where the strong stance taken by Lloyd’s over several planning cycles has positively and materially impacted pricing, terms and conditions”. Hiscox expected to continue to take advantage of the market environment and leverage its investment in technology on products such as FloodPlus, while “continuing to judiciously optimize the portfolio”.

Segmental analysis

2021 $000 Gross premiums written Gross premiums earned Gross claims incurred Net operating expenses  Reinsurance balance  Underwriting profit/(loss)
Marine aviation and transport 180,036 170,664 (102,155) (45,966) (454) 22,089
Reinsurance 545,473 518,506 (174,605) (53,505) (224,990) 65,406
Total 2,056,142 2,039,936 (1,058,307) (383,590) (405,889) 192,150
2020 $000 Gross premiums written Gross premiums earned Gross claims incurred Net operating expenses  Reinsurance balance  Underwriting profit/(loss)
Marine aviation and transport 212,270 187,363 (190,025) (51,133) 47,524 (6,271)
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)

https://assets.lloyds.com/media/54844225-e97d-42c1-9d6b-07f058f3e0fd/SRA0033c.pdf