Syndicate results 2021 #19 Axis 1686

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.

Active Underwriter   Alistair Robson

The Syndicate predominately writes marine, property, terrorism, professional lines, casualty, accident and health, political risk and reinsurance.

Following Syndicate 2007 being placed into run-off, from 2019 onwards all new and renewing AXIS Lloyd’s sourced business was transacted through Syndicate 1686.

In January 2021 the 2018 year of account of Syndicate 2007 and Syndicate 6129 closed by way of a reinsurance to close transaction into the 2019 year of account of Syndicate 1686.

Syndicate 1686 is a Lloyd’s Syndicate of Bermuda-based AXIS Capital Holdings Ltd (ACHL), the holding company for the AXIS group of companies known together as AXIS. The Syndicate is managed by AXIS Managing Agency Limited (AMAL). ACHL is the Syndicate’s sole capital provider with 100% indirect ownership of AXIS Corporate Capital UK Ltd and AXIS Corporate Capital UK II Ltd

The Syndicate commenced underwriting for contracts incepting from January 1st 2014.

For the Financial year ended December 2021 the Syndicate recorded GWP of $1.47bn, representing year on year growth of 17%. This growth was in part driven by the RITC of Syndicate 2007 into Syndicate 1686, and more significantly by positive rate change on renewal contracts across most classes of business.

No single class of business comprises more than 18% of total GWP.

In 2021 the Syndicate produced an underwriting profit of $65.9m, compared with a loss of $100.3m the previous year.

The Syndicate’s Net Combined Ratio for 2021 was 92.7%, a 21.5pp improvement over 2020.

Underlying performance, which is measured excluding the impact of losses arising from Covid-19 and natural catastrophes, improved across all aspects of the combined ratio against 2020. The syndicate said that this followed actions taken in recent years to reposition portfolios and reduce expense ratio.

The upward trend in rate movement continued throughout 2021, building on the positive rate change delivered in 2018, 2019 and 2020. Overall rate change for the Syndicate was 16.9%, against a plan of 12.5%, with all major product lines delivering positive rate change and improved price adequacy for the year.

KPI

$’000s 2021 2020  
GWP 1,473,056 1,256,152 17.3 %
NEP 1,075,885 846,247 27.1 %
Net technical profit excl inv ret 78,564 (119,938) 165.5 %
Net combined ratio (excl inv inc and FX) 92.7 % 114.2 %  

Segmental analysis

2021 $’000s GPW GPE GCI Net Op Exps Reins Bal Total
Direct Marine 63,168 59,438 (49,659) (16,419) 1,661 (4,979)
Energy marine 22,277 21,870 (7,385) (5,273) (4,398) 4,814
Total direct 1,048,531 993,515 (576,544) (337,702) (33,216) 46,053
Reinsurance 424,525 398,726 (255,227) (99,914) (11,074) 32,511
Total 1,473,056 1,392,241 (831,771) (437,616) (44,290) 78,564
2020 $’000s GPW GPE GCI Net Op Exps Reins Bal Total
Direct Marine 56,042 57,619 (33,034) (18,304) (6,471) (190)
Energy marine 15,589 15,077 (3,228) (5,976) (4,736) 1,137
Total direct 877,937 862,611 (621,131) (294,538) (53,892) (106,950)
Reinsurance 378,215 354,013 (239,376) (80,134) (47,491) (12,988)
Total 1,256,152 1,216,624 (860,507) (374,672) (101,383) (119,938)

Emoluments

The active underwriter received remuneration of $0.9m (2020: $1.1m) during the year based on the allocation of his service as active underwriter as a proportion of his service to other AXIS Group entities.

https://assets.lloyds.com/media/6065d7e6-4618-48c7-9563-65d2dc302682/SRA1686a.pdf