Syndicate results 2021 #24 Tokio MarineSyndicate 1880

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 M A Mortlock

Syndicate 1880 writes business on a split stamp basis, split 20% to Syndicate 1880 and 80% to Syndicate 510.

The syndicate is managed by Tokio Marine Kiln Syndicates Ltd, with capital provided on an aligned basis by Tokio Marine Underwriting Ltd.

In 2021 two important strategic initiatives were completed. A split stamp arrangement between Syndicate 1880 and Syndicate 510 was established, and the reorganization of the underwriting divisions across both syndicates was achieved. From January 1st 2021 all business underwritten to the 2021 year of account of Syndicate 1880 was on a split stamp basis, combining the existing business with that of Syndicate 510 on a fixed 20:80 split. The syndicate said that this split offered more diversified growth opportunities while simultaneously reducing  the operational complexities in underwriting management and outwards reinsurance purchasing.

In July 2021 the syndicate reorganized its underwriting divisions into six product-based departments. These comprised:

  • Property & Motor
  • Specialty (including Accident & Health, Contingency and Equine, Special Risks and Enterprise Risks)
  • Liability
  • Aviation
  • Marine & Energy
  • Reinsurance.
KPI £m 2021 2020
GWP 314.5 345.7
NEP 194.0 297.3
P/L 34.7 (1.4)
Inv Ret (0.8) 7.6
Claims ratio 36.7% 65.9%
Combined ratio 82.1% 103.9%

Syndicate 1880 saw growth in Aviation, Liability, and Marine & Energy, but a reduction in business on follow lines from Syndicate 510, Reinsurance and Property as the balance on the 20:80 split portfolio became established.

Notwithstanding the occurrence of a number of catastrophe events during the year, the net claims ratio of 36.7% compared favourably to the prior year ratio of 65.9%. This was driven by benign loss experience on the Open Market Property and Flood accounts and favourable prior year claims experience on the Construction, Specialty and Property classes.

The syndicate was impacted by Winter Storm Uri and Hurricane Ida. This resulted in a catastrophe claims ratio of 11.4% (2020: 21.4%). The previous year had been significantly impacted by losses arising from Covid-19.

Syndicate 1880 saw an investment loss of £0.8m for 2021, compared with a gain of £7.6m in 2020. The 2021 figure equated to a negative return of 0.4%, while for  2020 the positive return was 3.4%. The negative investment income in 2021 reflected rising yields on bonds.

Looking forward, B T Irick, Chief Executive Officer, said that, following the establishment of the split stamp arrangement in 2021, the syndicate benefited from a more diversified and balanced portfolio with reduced volatility. The volume of planned remedial action on the portfolio was now reducing going into 2022 with the focus moving to continuous portfolio management.

Rate and targeted exposure growth opportunities across better performing classes now exceeded the off-setting reductions from remedial actions. As a result, the syndicate was forecasting profitable growth into 2022.

The syndicate plan for 2022 continues on a fixed 20:80 split stamp basis with Syndicate 510.

Segmental analysis

2021 £000s GPW GPE GCI Net op exps Reins Bal. Total
MAT 25,777 12,898 (10,214) (7,161) 1,619 (2,858)
Reinsurance accepted 44,139 41,436 (17,777) (7,877) (1,698) 14,084
Total 314,525 293,722 (116,312) (107,776) (34,807) 34,827
2020 (restated*) £000s GPW GPE GCI Net op exps Reins Bal. Total
MAT 2,803 3,009 (1,222) (344) (1,510) (67)
Reinsurance accepted 51,111 66,561 (60,943) (14,785) (5,710) (14,877)
Total 345,681 361,761 (203,676) (118,692) (50,977) (11,584)

*The segmental note has been restated to more appropriately reflect the class of business split as per paragraph 85 of Schedule 3 within The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008.

The active underwriter received the following remuneration charged as a syndicate expense:

£’000 2021 2020
Emoluments 97 60