Covid-19 Losses

The Lloyd’s Market has announced estimated losses related to Covid-19 of £2.5 to £3.5bn, equivalent to 10% to 14% of 2019 Net Premium Earned (NPE).

31% of the estimated losses relate to Contingency, 17% Property (D&F), 12% Property Treaty and 11% Political Risks, Credit & Financial Guarantee.

The estimated losses are based on syndicates’ submitted totals together with an estimated downside uncertainty range, assuming material social distancing rules and restrictions persist regionally and/or globally until 30 June 2020.

Critical assumptions: no retrospective cover for Covid-19, Business Interruption wordings hold, some syndicates are including defence costs and costs of investigation.

The losses from Covid-19 compare to the previously reported Lloyd’s 2019 combined ratio of 102%, including major losses of 7% NPE.

2019 Syndicate Results

Syndicate annual results excluding non-technical investment returns (investment returns on Funds at Lloyd’s deposited at the syndicate level), ranged from a profit of 84% NPE (Net Premium Earned) to a loss of 109% NPE for those syndicates trading in 2019, excluding RITC syndicates.

The overall market weighted average technical profit for syndicates trading in 2019 was 1.7% of NPE.

The weighted average technical results by quartile were:
Top quartile +12.0% NPE
Second quartile +4.6% NPE
Third quartile -2.1 NPE
Fourth quartile -21.9% NPE

Press Release

LONDON, 12th May 2020 – Syndicate Research Limited (SRL) affirmed the A (Very Good) Continuity Opinion of Lloyd’s syndicate 33 (Hiscox Syndicates Limited). The outlook for the Continuity Opinion has been changed from stable to negative in light of the syndicate’s more recent performance aligning the syndicate’s overall scorecard assessment with the top of the A- (Good) peer group.

LONDON, 26th May 2020 – Syndicate Research Limited (SRL) today placed the B^ (Average), stable outlook, Continuity Opinion of Lloyd’s syndicate 5000 (Travelers Syndicate Management Limited) under review for possible downgrade in light of continuing underperformance relative to its Continuity Opinion peer group and its 2019 result being materially outside of expectations.

Independent and Experienced in Lloyd’s Research

Syndicate Research Limited (SRL) provides in-depth research on all trading syndicates operating in the Lloyd’s of London insurance market.

Syndicate Continuity Opinions (SCOs) have been assigned to active syndicates representing some 72% of the market’s capacity, with quantitative Scorecard Indicators assigned to syndicates representing c.95% of the market’s capacity.

With a combined experience of the Lloyd’s market of over 50 years, our team produces research which is used by clients the world over.

We value our independence; we do not accept payment from the syndicates or managing agents for coverage of their businesses.