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.
Michael John Meacock passed away peacefully on February 19th while on holiday on the island of Antigua. “This was a very sad day not only for Michael’s family but also for the directors and staff of our firm, S A Meacock & Company Ltd”, the syndicate said.
Deputy Underwriter A Taylor
The Closed 2020 Account
2020 closed with a profit of 5.36% of capacity, after standard personal expenses. The main contribution to the result came from a larger-than-average release from prior year reserves, reflecting a generally benign 12 months of development of ‘old year’ claims. The 2020 pure year ultimate loss ratio forecast itself was an improvement on the 2019 pure year, since Covid-19 losses fell mainly on 2019 YOA. The 2020 Account suffered from an investment loss which was the result of depressed valuations as at December 31st 2022 in the corporate bonds in which syndicate funds were largely invested. The syndicate said that these se same valuations would serve to increase the investment result for the 2021 and 2022 Accounts.
The Open 2021 Account
With insurance rates generally rising, the syndicate said that it was pleased to be shown a good volume of new or newish business in classes in which it had historically prospered, particularly professional indemnity and North American trucking business. Current loss ratios reflected the rate increases and there was a relative hiatus in the flow of property catastrophe losses in the USA, all of which held out the prospect of a result slightly better than in very recent years, the Syndicate said.
The Open 2022 Year of Account
The syndicate said that 2022 saw rate rises equal to or better than those achieved during 2021 and the cumulative rate rises were making most of its business look quite attractive, “so that we have taken on further meaningful amounts of premium in most of the classes we write, especially in property treaty reinsurance”.
The syndicate said that it was “just a little early to contemplate the ultimate outcome on this business but once we have evaluated the losses from Hurricane Ian which struck Florida in late September and from the war in Ukraine, which has had a major impact on some sectors of the world’s economy, there should be every chance of a profit”.
Prospects for the 2023 Account
The syndicate felt that prospects for 2023 were better than those for 2022 at the commencement of that account. Insurance rates on most of its classes of insurance and reinsurance continued on the upward trajectory that had been reported for the past twenty-four and more months. “In addition, interest rates around the globe have stepped up from next-to-nothing to something modest, which should allow us an increased chance of benefitting from the syndicate’s prudent reserves”, the syndicate said.
Deputy Underwriter A Taylor said that “over the last few years, Michael (Meacock) tried to raise the alarm about the costs of doing business in the Lloyd’s market. Nothing that we have seen or heard in the last year or so brought him any comfort in this regard. The squeeze will come for us when the rates begin their next downwards journey, which could be next year or next decade. We can only hope that the people who run the market start to see the writing on the wall – many underwriters have moved major portions of their businesses to other venues and the Room itself is dead on two days out of five.”
An analysis of the underwriting result before investment return for the three years ended 31 December 2022 is set out below:
|2020 YOA||GPW||GCI||GOE||Reins Bal||Total|
|Active underwriter emoluments||2022||2021|