Syndicate results 2021 #22 Starr Syndicate 1919

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   A Raven

The Syndicate business is underwritten under a limited number of binding authority arrangements granted to Starr Underwriting Agents Ltd (SUAL) in London. Lloyd’s consortium business for the 2014 and post years of account is written via SMAL. Delegated authority is also given to a number of Starr offices in overseas territories to access local markets not otherwise available to Lloyd’s. SUAL and SMAL share a single management team. SUAL and SMAL are both 100% owned by Starr Global Financial Inc (Nevada).

The result for the calendar year 2021 was a loss of $11.8m (2020: profit of $15.2m). The member’s funds total surplus is $87.1m (2020: surplus $68.5m). The Syndicate has the right to call upon Funds at Lloyd’s which are not shown on the Syndicate balance sheet.

Results in the 2021 calendar year were described as “mixed” across the various underwriting divisions of Syndicate 1919. It said that, despite the deceleration of the hardening market, the Syndicate had seen premium rate increases across the majority of classes, with the whole account risk adjusted rate increase percentage remaining in double figures.

Poor investment return and adverse performance on the Casualty portfolio were the material drivers for the loss during the year. Syndicate 1919’s invested bond portfolio fell by $8.2m, largely due to increasing bond yields throughout the period. The wider syndicate’s Casualty division, in line with the wider market, saw poor experience against plan as a result of case loss reserve strengthening on the 2017 & prior underwriting years in the General Liability and Financial Lines classes.

All Casualty portfolios have been remediated for the recent years of account. The division was one of the key drivers of the strong rate increases seen across the Syndicate.

The Syndicate’s Technical Risks, Aviation and Marine divisions performed well, which was mainly down to lower-than-expected loss experience. Aviation benefited from benign loss activity driven by reduced global flight activity off the back of the Covid-19 pandemic, while Tech saw a drop in levels of claims activity, at least in part, as a result of lower levels of economic activity, leading to strong profitability in Energy classes (Onshore and Offshore), Property and Construction. The other divisions of Syndicate 1919, including Accident and Health, Political Risks and the Aon Client Treaty division had losses in the year, to a much smaller extent.

KPI $000s 2021 2020
Gross written premiums 442,981 418,981
Net claims incurred 101,068 79,463
Profit / (Loss) for the period (11,840) 15,204
Combined ratio 110.36% 99.1%

From an insurance risk perspective, SMAL has not received material reports of claims, either by count or in financial value in relation to Covid-19. Syndicate 1919 had underwritten only a small number of travel insurance policies and did not operate within some of the most Covid-affected insurance markets, such as SME business interruption or contingency.

In 2021 the airline industry had again been hit by a reduction in the number of flights due to ongoing travel restrictions arising from Covid-19. Many airline insurance premiums were adjustable in nature and therefore reduced activity had led to a reduction in premium values. There had been a corresponding reduction in attritional losses, so this had not had any impact on the underlying profitability of these insurance contracts.

Segmental analysis

2021 $000s GPW GPE GCI Net op exps Reins Bal. Total
Direct MAT 56,067 51,520 (27,010) (2,894) (14,044) 7,572
Total Direct 341,979 323,721 (192,734) (17,985) (103,069) 9,933
Reinsurance 101,002 104,692 (122,995) (4,000) 819 (21,484)
Total 442,981 428,413 (315,729) (21,985) (102,250) (11,551)
2020 $000s GPW GPE GCI Net op exps Reins Bal. Total
Direct MAT 47,270 52,609 (14,947) (3,074) (28,518) 6,070
Total Direct 309,464 294,798 (190,716) (17,207) (85,813) 1,062
Reinsurance 109,517 117,544 (81,377) (7,888) (28,403) (124)
Total 418,981 412,342 (272,093) (25,095) (114,216) 938

Neither the Directors’ emoluments nor the active underwriter’s emoluments have been charged to the Syndicate for the 2021 year (2020: nil), but are retained by SUAL.