Press Release – 18th June 2021

Syndicate 382 – Syndicate Research Limited today downgraded the B^ (Average), negative outlook, Continuity Opinion of Lloyd’s syndicate 382 (Hardy (Underwriting Agencies) Limited) to B-^ (Below Average) in light of the syndicate’s 5-year average performance remaining in line with benchmarks for the B- Continuity Opinion peer group. The outlook for the Continuity Opinion is stable.

Syndicate 3000 – Syndicate Research Limited today downgraded the B+^ (Above Average), negative outlook, Continuity Opinion of Lloyd’s syndicate 3000 (Markel Syndicate Management Limited) to B^ (Average) in light of reduced profitability in recent years and the expectation of reducing investment returns that have historically underpinned its results. The outlook for the Continuity Opinion is stable.

Press Release – 15th June 2021

Syndicate 2001 – Syndicate Research Limited today downgraded the Continuity Opinion of Lloyd’s syndicate 2001 (MS Amlin Underwriting Limited) to B (Average) in light of continued underperformance relative to its Continuity Opinion peer group. The outlook for the Continuity Opinion remains negative.

Press Release – 14th June 2021

Syndicate 318 – Syndicate Research Limited today affirmed the B (Average) Continuity Opinion of Lloyd’s syndicate 318 (Cincinnati Global Underwriting Agency Limited). The outlook for the Continuity Opinion has been changed to negative in light of more recent years’ underwriting results.

Syndicate 2003 – Syndicate Research Limited today affirmed the B^ (Average) Continuity Opinion of Lloyd’s syndicate 2003 (Catlin Underwriting Agencies Limited). The outlook for the Continuity Opinion has been changed to negative in light of recent underwriting results.

2020 Syndicate Results

Syndicate annual results excluding non-technical returns (primarily investment returns on Funds at Lloyd’s deposited at the syndicate level), ranged from a profit of 95% NPE (Net Premium Earned) to a loss of 189% NPE for those syndicates trading in 2020, excluding RITC syndicates and “Syndicate-In-A-Box” start-ups.

The overall market weighted average technical loss for syndicates trading in 2020 (excluding RITC syndicates) was 7.4% of NPE.

The weighted average overall technical results by quartile were:
Top quartile                  +11.6% NPE
Second quartile            -2.5% NPE
Third quartile                -11.2% NPE
Fourth quartile              -36.5% NPE

The overall technical loss for the bottom quartile of syndicates, representing 16% of total NPE, accounted for 77% of the market’s loss.

Lloyd’s Full Year Results

The Lloyd’s Market has reported a pre-tax loss of £887m for 2020 on a combined ratio of 110.3% (2019: profit £2,532m; 102.1%), being a loss of 3% on average capital (2019: 9% profit). The result was impacted by £3.4bn of COVID-19 losses, adding 13.3 points to the combined ratio, and a higher frequency of catastrophe losses. A 5.3 point improvement in the attritional loss ratio and 1.5 point reduction in expenses materially improved the underlying results.

The 110% combined ratio and overall loss of 3.4% of NPE was in line with SRL’s expectations of a ‘combined ratio for full-year 2020 of around 110%’ and a limited loss for the year ‘of some 5% NPE’ (Lloyd’s Interim Results H1 2020 Special Report September 2020).

Investment returns were reduced at 8.8% of NPE (2019: 13.7%, benefiting from mark-to-market gains).

Lloyd’s overall loss of 3.4% of NPE compares to a profit of 9.8% NPE in 2019.

SRL notes that the accident year combined ratio excluding major losses was 89% (calendar year combined ratio excluding major losses 87%, net of prior year releases) and compares to the 10-year average major claims for Lloyd’s of 12% NPE. However, the improvements following Lloyd’s Performance Review of 2018 are now flowing through to the reported results, with the benefits of recent rate increases yet to be reflected and continuing pressure to maintain momentum against a background of likely reduced investment returns and the potential for marked to market investment losses.

Independent and Experienced in Lloyd’s Syndicate Research

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

Syndicate Continuity Opinions (SCOs) – taking into account cross-cycle Returns on Capital and Group support – 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.