Lloyd’s has released forecasts for the 2016 and 2017 years of account after 33 and 21 months respectively.

There has been a deterioration at market level for both years of account, although the movement for Argenta clients in aggregate on the 2016 account is a small (0.1% of capacity) improvement. 12 syndicates have reduced their forecast for this year of account, with the largest slide being at Apollo Syndicate 1969, which increased its loss estimate by 5 percentage points to 20% of capacity at midpoint. Conversely, 9 syndicates improved their forecasts, with the best improvement being at Asta Syndicate 2525, which has increased its midpoint forecast from a loss of 1.25% of capacity to a profit of 5%.

Managing agents carry out a dummy reinsurance to close at the third quarter, and these forecasts will include movements on the reserves held for the 2015 and prior years of accounts. We do not receive the underlying syndicate data until later this week, so it is not possible to comment on the source of the changes in the year to date, although it is apparent that investment returns have been under pressure during 2018, with increases in interest rates manifesting themselves as a loss in capital value for bond portfolios, and we expect the full year investment return (which is largely allocated to the oldest year of account) to be disappointing. The loss of a superyacht in construction at a shipyard in Germany in September will have made its way into the claims figures for the first time. As this was a construction loss, it impacts the year in which the construction started, which in this case is 2014, which through the chain of reinsurance to close ends up with the 2016 year.

The 2017 account has also deteriorated at the overall market level. Once again the aggregate movement for Argenta clients is better than the market average, the former is reduced by 0.1 percentage points, while the market has deteriorated by 0.23 percentage points. 13 syndicates have reduced their forecast, while 6 syndicates have improved theirs. Catlin Syndicate 6111, which incorporated an error in the calculation of expenses in its forecasts as at 30 June, has improved as a consequence of correcting this error.

There are no forecasts for the 2018 year of account until the end of the 15th month (31 March 2019 and due to be released in May 2019) but the year will have sustained some catastrophe losses following Hurricanes Florence and Michael, Typhoons Jebi, Mangkhut and Trami and the recent outbreak of wildfires in California. Syndicates are only reporting on the period to 30 September, so those losses which occurred in October and November will not be included in the data at this quarter end. Although there has been an uptick in catastrophe activity in the second half of the year, there has been no loss as large as any one of the three hurricanes to hit the USA in 2017 and the first half of 2018 was exceptionally quiet from a catastrophe point of view. Although catastrophe experience probably has now exceeded the long term average for the year, we do not currently expect that this will consign 2018 to a loss, although we will report further when we have carried out our usual analysis of syndicate data.

2016 forecast results

 

Syndicate

Managing
agent

Capacity
£000s

Revised forecast range

Previous forecast
range

Change at
midpoint

33

Hiscox

998,840

-5.0% to 5.0%

-5.0% to 5.0%

Unchanged

218

ERS

359,462

-9.8% to 0.2%

-9.9% to 0.1%

0.1 points better

308

TMK

31,879

-16.9% to -11.9%

-14.6% to -9.6%

2.3 points worse

318

Beaufort

235,044

-14.3% to -9.3%

-17.1% to -12.1%

2.8 points better

386

QBE

352,164

3.6% to 8.6%

5.4% to 10.4%

1.7 points worse

510

TMK

1,061,786

0.4% to 5.4%

-1.1% to 3.9%

1.5 points better

557

TMK

34,710

12.9% to 17.9%

13.3% to 18.3%

0.4 points worse

609

Atrium

418,764

5.0% to 10.0%

5.0% to 10.0%

unchanged

623

Beazley

257,277

0.0% to 10.0%

0.0% to 10.0%

unchanged

727

Meacock

80,569

1.5% to 6.5%

-2.0% to 8.0%

1.0 points better

779

AmTrust

22,176

-35.0% to -25.0%

-35.0% to -25.0%

unchanged

1176

Chaucer

34,931

35.0% to 45.0%

30.0% to 45.0%

2.5 points better

1200

Argo

424,869

-20.0% to -10.0%

-18.0% to -8.0%

2.0 points worse

1492

Capita

90,466

-14.4% to -10.4%

-13.9% to -9.9%

0.4 points worse

1729

Asta

89,800

-12.5% to -5.0%

-12.5% to 2.5%

3.8 points worse

1884

C Taylor

90,000

-35.0% to -25.0%

-35.0% to -25.0%

unchanged

1910

Argo

121,014

16.9% to 26.9%

15.4% to 25.4%

1.5 points better

1969

Apollo

179,509

-22.5% to -17.5%

-17.5% to -12.5%

5.0 points worse

1991

Coverys

129,740

-6.3% to 3.7%

-6.3% to 3.7%

unchanged

2010

Cathedral

305,720

2.5% to 7.5%

0.0% to 7.5%

1.3 points better

2014

Pembroke

129,336

-8.5% to -3.5%

-4.7% to 0.3%

3.8 points worse

2121

Argenta

269,927

-2.0% to 3.0%

0.0% to 5.0%

2.0 points worse

2525

Asta

49,827

2.5% to 7.5%

-7.5% to 5.0%

6.3 points better

2526

AmTrust

60,000

-22.0% to -12.0%

-22.0% to -12.0%

unchanged

2791

MAP

399,118

2.5% to 7.5%

0.0% to 5.0%

2.5 points better

4242

Asta

95,000

-2.5% to 2.5%

0.0% to 5.0%

2.5 points worse

4444

Canopius

974,536

-8.2% to -3.2%

-6.2% to -1.2%

1.9 points worse

5820

AmTrust

131,046

-12.5% to -7.5%

-15.0% to -5.0%

unchanged

6103

MAP

13,905

12.5% to 22.5%

12.5% to 22.5%

unchanged

6104

Hiscox

55,534

30.0% to 40.0%

30.0% to 40.0%

unchanged

6107

Beazley

28,622

20.0% to 40.0%

20.0% to 40.0%

unchanged

6111

Catlin

115,591

-6.5% to -1.5%

-6.7% to -1.7%

0.1 points better

6117

Argo

51,674

11.6% to 21.6%

9.4% to 19.4%

2.2 points better

6123

Asta

15,000

-23.3% to -18.3%

-20.0% to -15.0%

3.3 points worse

Aligned syndicates

19,804,060

-8.3% to -3.3%

-7.6% to -2.6%

0.7 points worse

Lloyd’s market

27,511,895

-7.19% to -1.69%

-6.67% to -1.06%

0.6 points worse

2017 forecast results

 

Syndicate

Managing agent

Capacity
£000s

Revised forecast range

Previous forecast
range

Change at
midpoint

33

Hiscox

1,147,315

-10.0% to 0.0%

-10.0% to 0.0%

unchanged

218

ERS

478,865

-2.2% to 7.8%

-2.7% to 7.3%

0.5 points better

308

TMK

30,887

-54.9% to -49.9%

-54.8% to -49.8%

0.1 points worse

318

Beaufort

234,774

-38.0% to -33.0%

-32.1% to -27.1%

5.9 points worse

386

QBE

316,636

8.5% to 13.5%

5.2% to 10.2%

3.3 points better

510

TMK

1,130,535

-12.7% to -7.7%

-12.5% to -7.5%

0.3 points worse

557

TMK

34,060

-32.1% to -27.1%

-31.2% to -26.2%

0.9 points worse

609

Atrium

419,238

-7.5% to 2.5%

-7.5% to 2.5%

unchanged

623

Beazley

304,482

-10.0% to 10.0%

-10.0% to 10.0%

unchanged

727

Meacock

80,635

-3.0% to 7.0%

-8.0% to 7.0%

2.5 points better

1176

Chaucer

37,480

25.0% to 45.0%

20.0% to 40.0%

5.0 points better

1200

Argo

445,526

-16.2% to -6.1%

-16.2% to -6.1%

unchanged

1492

Capita

90,466

-25.6% to -20.6%

-23.8% to -18.8%

1.8 points worse

1729

Asta

99,904

-17.5% to -2.5%

-17.5% to -2.5%

unchanged

1884

C Taylor

99,985

-40.0% to -20.0%

-40.1% to -20.0%

0.0 points better

1969

Apollo

209,123

-24.0% to -14.0%

-22.5% to -12.5%

1.5 points worse

1991

Coverys

126,750

0.0% to 10.0%

0.0% to 10.0%

unchanged

2010

Cathedral

304,584

-25.0% to -15.0%

-25.0% to -15.0%

unchanged

2014

Pembroke

136,918

-19.1% to -9.1%

-17.8% to -7.8%

1.4 points worse

2121

Argenta

298,103

-2.5% to 7.5%

-2.5% to 7.5%

unchanged

2525

Asta

47,990

-7.5% to 7.5%

-12.5% to 2.5%

5.0 points better

2689

Asta

49,956

-33.8% to -23.8%

-30.9% to -20.8%

3.0 points worse

2791

MAP

396,814

-7.5% to 0.0%

-7.5% to 0.0%

unchanged

2988

BRIT

54,963

-33.0% to -28.0%

-32.0% to -27.0%

1.0 points worse

4242

Asta

100,000

-48.5% to -38.5%

-43.6% to -33.6%

4.8 points worse

4444

Canopius

974,847

-12.8% to -7.8%

-11.9% to -6.9%

0.9 points worse

5886

Asta

149,904

-23.0% to -18.0%

-20.0% to -15.0%

3.0 points worse

6103

MAP

15,705

-10.0% to 0.0%

-10.0% to 0.0%

unchanged

6104

Hiscox

54,490

-40.0% to -30.0%

-40.0% to -30.0%

unchanged

6107

Beazley

46,585

-35.0% to -5.0%

-35.0% to -5.0%

unchanged

6111

Catlin

23,919

-28.3% to -23.3%

-30.7% to -25.7%

2.4 points better

6117

Argo

106,818

-31.7% to -21.7%

-27.2% to -17.2%

4.5 points worse

6123

Asta

15,000

-51.5% to -41.5%

-48.8% to -38.8%

2.7 points worse

Aligned syndicates

22,232,587

-12.2% to -7.2%

-12.0% to -7.0%

0.2 points worse

Lloyd’s market

30,295,845

-12.5% to -6.5%

-12.3% to -6.3%

0.2 points worse

 

The full results can be found here in pdf format and here in xls format.