Syndicate results 2021 #49 Hamilton (in Run-off) 3334

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.

Run-off Manager     B. J. Taylor

The principal activity of Syndicate 3434 was the underwriting of general insurance and reinsurance business at Lloyd’s until December 31st 2019, at which point it was placed into run-off.

As a result of the acquisition of HMA, a Group Board decision was made to renew the Syndicate’s underwriting business in Syndicate 4000 from January 1st 2020. In line with the decision to place the Syndicate into run-off, the Syndicate was reinsured to close into Syndicate 4000, effective January 1st 2022.

Treaty/Reinsurance The focus was on short-tail classes, worldwide, offering products including:

  • Energy: offered on excess of loss and pro rata bases for onshore/offshore, power generation, renewables, wind and Gulf of Mexico.
  • Marine: offered for hull, yacht, cargo, specie, fine art, marine liability and marine war.
  • Property Treaty: per risk, catastrophe and pro rata coverage for commercial and residential accounts.
  • War and Terrorism: excess of loss and treaty basis, including for country pools.
  • Accident and Health: per risk and catastrophe coverage on excess of loss and treaty bases.

The marine account had two main sub-classes: Marine Liability and Energy Liability. In addition, a small amount of Seafarers’ Abandonment business was also written.

KPIs

£m 2021 2020
Gross earned premiums 7.2 70.1
NEP 1.8 (11.8)
Loss for the financial year (10.8) (0.9)
Total comprehensive loss for the financial year (11.4) (1.7)
Investments, cash and deposits 61.3 104.9

The Syndicate reported a loss for the year of £10.8m (2020: £0.9m).

On February 6th 2020 HMA, on behalf of the Syndicate, entered into a retrospective quota share arrangement with another Lloyd’s syndicate as the reinsurer. Under this the reinsuring syndicate provided proportional back-to-back quota share reinsurance cover on the net technical provisions for the run-off of professional lines claims within the Syndicate’s 2018 & prior underwriting years. This was the driver of the negative net earned premiums in 2020. The premium payable for this contract is within outwards reinsurance premiums and the resulting claims recovered and recoverable are included in reinsurance recoveries for the year.

In 2021 the total net claims reported were £5.9m (2020: net claims credit of £26.0m). In 2020 this was skewed by the impact of the retrospective quota share contract referred to above.

The gross claims in 2021 included losses relating to the professional lines book, which were covered 100% by the retrospective contract. Due to the run-off of the book the Syndicate had lessened exposure to catastrophe events during 2020 and into 2021.

Syndicate assets have decreased by £50.1m to £205.0m (2020: £255.1m) and the total liabilities, excluding members’ balances, have decreased by £38.9m to £207.7m (2020: £246.6m) in line with continued run-off of the Syndicate’s business.

Segmental information

2021 £000s GPW GPE GCI Op Exps Reins Bal Total
MAT (88) 825 (3,810) (588) 2,776 (797)
Total Direct 295 5,722 (49,931) (4,343) 41,734 (6,818)
Reinsurance 374 1,442 (10,105) (1,942) 7,048 (3,557)
Total 669 7,164 (60,036) (6,285) 48,782 (10,375)
2020 £000s GPW GPE GCI Op Exps Reins Bal Total
MAT (579) 9,626 (9,322) (2,338) (1,478) (3,512)
Total Direct 16,173 61,380 (43,740) (16,167) (5,908) (4,435)
Reinsurance 1,067 8,725 (3,427) (2,138) (2,786) 374
Total 17,240 70,105 (47,167) (18,305) (8,694) (4,061)

The remuneration in relation to the Run-off Manager charged as a syndicate expense during the year comprised emoluments of £46,000 (2020: £59,000) and pension contributions of £4,000 (2020: £1,000).

https://assets.lloyds.com/media/2eb5fbf5-5272-4320-ac90-469925259f64/SRA3334a.pdf