Syndicate results 2021 #25 Arch 1955 published Wednesday May 25th

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.

Chief Underwriting Officer  P Leoni

Syndicate 1955 currently underwrites general insurance and reinsurance business in the Lloyd’s Market. The business within these segments includes Marine, Aviation and Transport, Energy, Property, Financial Lines, Accident & Health, Casualty and Specialty.

As at 31 December 2021, the Syndicate was managed by AMAL and the ultimate parent company is US-listed, Bermuda-based Arch Capital Group Ltd, which operates in Bermuda, the United States of America, Europe, Canada, and Australia. For 2019 and 2020 underwriting years the single largest corporate member is Arch Corporate Member Ltd (formally Barbican Corporate Member Ltd) and for 2021 underwriting year the single largest corporate member is Arch Syndicate Investments Ltd. The Syndicate also has a number of third- party capital providers.

The Syndicate said that the rating environment continued to have a positive impact during 2021, with firmer pricing for many lines of business. Reflecting the strengthened rating environment, the Syndicate’s underwriting strategy for 2021 was more aggressive. There was a 14% increase in forecasted GWP per the syndicate business forecast via the addition of parametric cover and large increases in written premium for Cyber and US casualty Treaty classes of business.

The focus for 2021 was the continued growth of Syndicate 1955 through expansion of profitable lines of business, including the split stamp arrangement for insurance lines with Syndicate 2012, which resulted in proportional growth in these lines of business on the 2021 underwriting year.

KPI

£m 2021 2020
GPW 341.6 269.8
P/L (8.5) (38.9)
CR 103.0% 120.3%

This is before the SPA cession and therefore does not correspond precisely to the retained P/L and CR.

During 2021 the Syndicate experienced a decrease of claims incurred due to the impact of Covid-19 on the 2020 underwriting year. Management reviewed the Syndicate’s overall provision in light of the outcome of the FCA’s Business Interruption Test Case.

Other losses for which the Syndicate had large exposure during the year were Hurricane Ida (£7.9m net) and civil unrest in South African (£2.4m net).

Segmental Information

2021 £000s GPW GPE GCI GOE Reins. Bal Total
Direct Marine 16 9 (3) (1) 5
Direct Energy Marine 23,753 14,531 (2,010) (4,278) (6,371) 1,872
Total Direct 124,810 110,703 (70,989) (60,804) (5,567) (26,657)
Marine Reinsurance 67,275 66,083 (45,883) (12,649) (14,018) (6,467)
Energy Reinsurance 5,526 10,466 (7,274) 1,998 (1,914) 3,277
Reinsurance Total 216,797 208,966 (140,551) (19,265) (29,107) 20,043
Total 341,607 319,669 (211,540) (80,069) (34,674) (6,614)
2020 £000s Restated GPW GPE GCI GOE Reins. Bal Total
Direct Marine 401 386 346 409 (4,091) (2,950)
Direct Energy Marine 6,541 8,439 (5,080) (2,971) (2,218) (1,830)
Total Direct 81,237 110,737 (83,851) (41,552) 7,144 (7,522)
Marine Reinsurance 55,130 44,118 (44,256) (6,144) (15,527) (21,809)
Energy Reinsurance 12,156 13,807 (9,760) (2,222) (3,069) (1,244)
Reinsurance Total 188,581 173,674 (162,515) (31,584) (12,208) (32,633)
Total 269,818 284,411 (246,366) (73,136) (5,064) (40,155)

The 2020 segmental analysis was restated to provide information at a more granular class of business level and to reflect new business written through Lloyd’s Insurance Company SA as reinsurance. This change was made to improve clarity of disclosure and not to correct a prior year error.

For comparison with other syndicates, segmental information is as follows:

2021 £000s GPW GPE GCI GOE Reins. Bal Total
Direct MAT 12,808 12,808 (8,209) (3,851) (1,390) (642)
Direct Total 107,029 107,029 (78,292) (53,515) 344 (24,234)
Reinsurance Total 200,496 200,496 (178,477) (9,530) 1,832 14,321
Total 307,525 307,525 (256,769) (62,845) 2,176 (9,913)

The Directors of AMAL and the Active Underwriter received the following aggregate remuneration charged to the Syndicate during the year:

£000s 2021 2020
Directors of the Managing Agent 2,168 1,400
Active Underwriter 180 200

https://assets.lloyds.com/media/5e1fd5bf-cde6-4770-bb1e-6b99bb30f0ae/SRA1955c.pdf