Syndicate results 2021 #50 Riverstone 3500

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.

Syndicate 3500 was originally formed in 2003 to accept the reinsurance to close of the 2000 and prior years of account of Syndicate 271 and the 2001 and prior years of account of Syndicate 506, respectively.

Effective January 1st 2021, Syndicate 3500 entered into the following transactions:

  • the reinsurance to close of the 2018 and prior underwriting years of account liabilities of Syndicate 780. This transaction resulted in the transfer to Syndicate 3500 of gross and net technical provisions of $178.9m and $114.5m respectively;
  • the reinsurance to close of the 2018 and prior underwriting years of account liabilities of Syndicate 1897. This transaction results in the transfer to Syndicate 3500 of gross and net technical provisions of $78.6m and $73.2m respectively;
  • the loss portfolio transfer reinsurance of the 2019 underwriting year of account liabilities of Syndicate 1897. This transaction results in the transfer to Syndicate 3500 of gross and net technical provisions of $17.6m and $17.3m respectively; and
  • the reinsurance to close of the 2017 and prior underwriting years of account liabilities of syndicate 1200 and the reinsurance to close of the 2018 and prior underwriting years of syndicate 4000. These transactions result in the transfer to Syndicate 3500 of gross and net technical provisions of $1.1bn and $857m respectively.

Four other LPT reinsurances of other unnamed Lloyd’s syndicates took place.

On 1st January 2022 Syndicate 3500 also accepted the reinsurance to close of the 2019 year of accounts for Syndicate 1897 and Syndicate 2468, both also managed by RiverStone Managing Agency. These transactions result in the transfer to Syndicate 3500 of net technical provisions of $0 and $306m respectively.

On August 23rd 2021 CVC Capital Partners completed the acquisition of RiverStone Europe from Fairfax Financial Holdings Ltd and OMERS, the pension plan for Ontario’s municipal employees. The RiverStone Europe Group will now operate under the name RiverStone International.

Gatland Bidco Limited, a wholly-owned subsidiary of Gatland Holdings Jersey Ltd, completed the acquisition of all the outstanding shares of Riverstone Barbados Limited. RiverStone Managing Agency and its immediate parent company RiverStone Holdings were wholly owned subsidiaries of RBL.

The sole corporate member for Syndicate 3500 is RiverStone Corporate Capital Ltd.

The profit for 2021 financial year on an annual accounting basis, was $6m (2020: loss of $3.4m). The balance on the technical account for general business for the year was a profit of $6.2m (2020: profit of $1.3m). This comprised net earned premiums of $2.17bn, partially offset by net incurred claims of $2.15bn and net operating expenses of $22m. Net earned premiums and net incurred claims include the RTCs and LPTs listed above.

The profit for the financial year of $6m (2020: $3.4m loss) comprised net investment gains of $3.2m (2020: gain of $0.3m), FX losses of $4.6m (2020: losses of $4.9m) and the gain on the technical account for general business.

Member’s balances increased to a surplus of $37m as of December 31st 2021 (2020: $20.5m).

As of the end of 2021 total outstanding claims, gross of reinsurance, were $2.6bn (2020: $770.4m). Total cash, deposits and investments were $1.6bn (2020: $418m).

From January 1st 2021 the Syndicate changed its functional and presentational currency to USD from Pounds Sterling.

Segmental Information

2021 $000s GPW GPE GCI Op Exps Reins Bal
Direct MAT 88,766 87,736 (104,289) (685) 26,498
Total Direct 698,316 667,574 (837,373) (5,527) 167,348
Reinsurance 1,610,766 1,493,104 (1,562,366) (6,426) 86,892
Grand Total 2,309,082 2,160,678 (2,399,739) (11,953) 257,240
2020 $000s GPW GPE GCI Op Exps Reins Bal
Direct MAT 9,960 9,987 (20,040) (2,888) (1,520)
Total Direct 131,575 111,979 (161,090) (19,140) 59,497
Reinsurance 20,132 20,394 (19,089) (1,939) 10,715
Grand Total 151,707 132,373 (180,178) (21,079) 70,213

The Directors, Run-off Manager and other key management personnel of Syndicate 3500 receive no emoluments from RiverStone Managing Agency. The contracts of employment of the UK executive Directors and employees are with RiverStone Management, which makes charges for the services described above.

$000s 2021 2020
Directors, run off manager and key management personnel 2,233 1,498
Run off manager 393 286

https://assets.lloyds.com/media/daf35320-a5ba-40a5-9ef2-6c00e7aea812/SRA3500a.pdf