2021 Syndicate Results

Syndicate annual results¹ ranged from a profit of 71% NPE (Net Premium Earned) to a loss of 107% NPE for those syndicates trading in 2021, excluding RITC syndicates.

The overall market weighted average profit¹ for syndicates trading in 2021 (excluding RITC syndicates) was 7.0% of NPE.

The weighted average overall results¹ by quartile were:
Top quartile +20.5% NPE
Second quartile +8.8% NPE
Third quartile +0.3% NPE
Fourth quartile -14.7% NPE

The overall loss¹ for the bottom quartile of syndicates, representing 11% of total NPE, represented 24% of the overall market profit for those syndicates trading in 2021.

¹ Excluding capital-related returns (primarily investment returns on Funds at Lloyd’s deposited at the syndicate level); a limited number of syndicates hold capital at the syndicate level and these returns have been excluded to achieve comparability between syndicates.

Lloyd’s Full Year Results

The Lloyd’s Market reported a pre-tax profit of £2,277m for 2021 on a combined ratio of 93.5% (2020: loss £887m; 110.3%), being a return of 6.6% on average capital (2020: 2.6% loss), despite an elevated level of catastrophe claims in the US and Europe. The result benefited from the non-recurrence of the £3.4bn of COVID-19 losses, which added 13.3 points to the combined ratio in 2020; excluding COVID, the combined ratio improved by 3.5 points. A 3.0 point improvement in the attritional loss ratio and 1.6 point reduction in operating expenses ratio materially improved the underlying results. The improvement was offset by investment returns reducing by 5.2 points.

Lloyd’s overall profit of 8.5% of NPE compares to a loss of 3.4% NPE in 2020.

While too early to quantify with any accuracy, the conflict in Ukraine is likely to result in a major loss for the market, affecting, in particular, Aviation, Credit, Cyber and Political Risk classes. To date, losses are expected to remain within manageable tolerances.

SRL notes that the accident year combined ratio excluding major losses was 84% (calendar year combined ratio excluding major losses 82%, net of prior year releases) and compares favourably to the 10-year average major claims for Lloyd’s of 10% NPE.

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 71% of the market’s capacity, with quantitative Scorecard Indicators assigned to syndicates representing c.93% 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.