Syndicate results 2021 #3 Hardy 382

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 C Day

Hardy Underwriting Agencies (HUA) is the managing agent for Syndicate 382. HUA is wholly owned by Hardy Underwriting Bermuda Ltd (HUB). Hardy Underwriting Limited (HUL), another wholly owned subsidiary of HUB, is a corporate member of Lloyd’s and is the sole provider of underwriting capacity to Syndicate 382.

HUB in turn is wholly owned by The Continental Corporation (TCC), itself a wholly owned subsidiary of CNA Financial Corporation (CNAF), which is controlled by Loews Corp.

The Syndicate reported a profit of £9.6m in 2021, compared to a loss of £13.4m in 2020. The calendar year combined ratio in 2021 was 94.2%, down from 111.0% the previous year.

GWP fell by 8.3% year on year to £254.4m, down from £277.4m in 2020. The Syndicate said that the decrease was driven primarily by planned portfolio actions. Net written premiums of £211.8m were down from £229.5m in 2020.

On a calendar year basis the net loss ratio of 61.8% represented a 12.7pp improvement over the prior year ratio of 74.5%. The Syndicate said that the improvement was driven by the favourable impact of loss development relating to prior accident years, as well as by the impact of Covid-19-related losses in the prior year.

The Syndicate shares its operating and management structure with other group companies, those being CNA Insurance Co Ltd and CNA Insurance Co (Europe) SA. All three operate under a combined operating platform with management and administrative services being provided by service company CNA Services (UK) Ltd.

The Syndicate pays CNA Services a management fee for the provision of management and administration services. CNA Services employs all of Syndicate 382’s UK staff.

The expense ratio for the year fell to 32.4%, from 36.5% in 2020, an improvement primarily driven by a reduction in levels of brokerage costs.

Investment returns were minus £0.9m, compared to a gain of £8.9m in 2020.

The decrease was driven primarily by movements in unrealized losses, the Syndicate said.

During the year the Syndicate recorded losses on foreign exchange of £1.9m (2020: gain of £4.2m).

KPI

£m 2021 2020
Gross written premiums 254.4 277.4
Net written premiums 211.8 229.5
Profit/(loss) for the financial year 9.6 (13.4)
Loss ratio 61.8% 74.5%
Expense ratio 32.4% 36.5%
Combined ratio 94.2% 111.0%

J Rehman. Director, said that in recent years the Syndicate had taken targeted underwriting actions to improve overall levels of profitability. The Syndicate ceased writing several lines of business and focused on improving the performance of its remaining businesses. Rehman said.

The Syndicate said that it was aware of the developing events in Ukraine, which it continued to monitor. “At this stage, we do not believe they will have a material impact to the Syndicate’s operations”, it said.

Segmental Information

2021 £000 GWP GPE GCI NOE Reins Bal
MAT 14,217 15,968 (12,672) (4,520) 1,965
Assumed reinsurance 113,759 115,987 (70,178) (30,232) (12,366)
Total 254,400 251,983 (167,596) (68,048) (4,068)
2020 £000 GWP GPE GCI NOE Reins Bal
MAT 13,312 12,262 (16,688) (4,200) 4,549
Assumed reinsurance 118,788 126,110 (79,331) (37,220) (8,938)
Total 277,433 288,370 (208,738) (87,209) (18,729)
           

Favourable prior year loss development of £8.6m was recorded in 2021, compared to unfavourable development of £7.3m in the prior calendar year.

Emoluments active underwriter

2021 2020
£889,000 £930,000

https://assets.lloyds.com/media/9cea051e-a128-42a1-84c3-a6a92f342a2a/SRA0382a.pdf