The Lloyd’s syndicates have now published their results for 2022 and, in some cases, added detail and an outlook for 2023. Some have stuck to the bare bones. As in the previous few years, IMN is summarizing the results from all syndicates that have a notable marine interest, if they have provided some information on the marine side.
The Syndicate principally issues the following types of general insurance contracts: accident and health, third-party liability, marine, fire, pecuniary loss and peril. Risks usually cover 12 months duration.
Active Underwriter J Moffatt
On February 2nd 2023 Ohio Farmers Insurance Co purchased Lloyd’s managing agency Argo Managing Agency Ltd from Argo Group. Managing Agency is now Westfield Specialty Managing Agency Ltd.
Dymphna Lehane took over as chairman from Tony Latham in November 2022.
Ms Lehane said that the Syndicate performed strongly in 2022, delivering an operating profit of £26.7m (£20.3m in 2021). This was driven by an improved underwriting profit of £46.5m (£23.3m in 2021). She said that the Syndicate took advantage of continued rate strengthening across most lines. GWP rose by 6% to £637.3m (2021: £599.9m). This was despite decisions taken in 2022 to exit certain property lines of business. The Combined Ratio (on a comparable basis) improved to 88.6% (2021: 94.4%).
Insured catastrophe losses impacted the combined ratio by 7.1 percentage points.
Operating profit was impacted by actions taken by central banks across the world in raising interest rates during 2022. Unrealized investment losses of £11.2m for the year represented a 2.8% reduction on the year end portfolio value. The overall impact on the syndicate result was mitigated by the short dated, high credit quality investment portfolio of Syndicate 1200, Lehane said.
|£m||2022 excl LPT||2021|
|Gross written premium||637.3||599.9|
|Profit/(Loss) for the financial year||31.1||20.3|
|Loss ratio %||51.4||54.2|
|Expense ratio %||37.2||40.2|
|Combined ratio %||88.6||94.4|
2020 year of account – closing year
The syndicate reported a profit for the 2020 closed year of account with a return on capacity of 3.4% and a profit of £15.2m. This was an improvement on the forecast result last year end of £2.4m, a 0.5% projected return on stamp.
The syndicate was encouraged by the fact that “we saw that much needed rating momentum that started in 2019 continued throughout the 2020 year”.
The main insurable impact on the syndicate was in the Contingency book from event cancellation losses (which the syndicate exited during this year of account). The majority of those losses fell to the 2019 year, with a proportion attached to the 2020 year of account.
Compounding those losses, the syndicate experienced an unusually active North Atlantic Hurricane season, with a record number of storms making US landfall. These events translated into a year characterized by frequency rather than severity of weather losses. The 2020 year was also impacted by Storm Uri and a number of Atlantic storms.
The 2019 and prior years of account experienced favourable development of £9.9m prior to entering into a LPT with Riverstone Syndicate 3500 during 2022. Following significant economic turbulence in 2022 and the resulting negative impact on the investment market, the overall loss on the investment portfolio was £8.1m.
2021 year of account
Further rate increases were expected to continue into 2021. Accordingly, syndicate capacity was raised to £500m for the 2021 year of account. The 2021 calendar year was yet another year of severe weather losses. The year started with the very unusual Storm Uri and continued with a very active Atlantic storm season. Following this further year of heightened weather losses in the final quarter the syndicate decided to reduce future volatility in the Syndicate further and exited London D&F Property and its North American Binder businesses. The syndicate said that it was “very pleased to see that following the major underwriting actions taken over the last few years that for the second year in a row our underlying attritional losses are developing within our expectations”
2022 year of account
The syndicate expected the favourable underwriting environment to continue into 2022, although rate increases were expected to vary in strength by individual line of business. Despite this expected increasing rate environment, capacity was maintained at £500m as it decided to reduce volatility by exiting certain property lines. The recent trend of climate related losses continued into 2022, with market losses above the five-year average.
The Syndicate’s gross written premium income by class of business comprises:
|Year of account||2022 F %||2021 F %||2020 A %|
|Yachts & Hull||0.5||0.4||0.7|
|Total short tail||53.5||59.2||61.6|
|Total Longer Tail||46.5||40.8||38.4|
|2022 £m||GPW||GPE||GCI||GOE||Reins Bal||Total|
|Energy – Marine||12.6||13.8||(11.6)||(3.6)||(1.1)||(2.5)|
|2021 £m||GPW||GPE||GCI||GOE||Reins Bal||Total|
Active underwriter emoluments