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May 15, 2019

2017 and 2018 Estimates as at March 2019

Image for 2017 and 2018 Estimates as at March 2019

Lloyd’s released to the LSE today the updated estimates for the 2017 Account and the first complete set of 2018 Account estimates as at end-March 2019.

We will be writing to Hampden Members with their own individual reports of their 2017 and 2018 estimates including a Bulletin published by Hampden Underwriting Research (HUR) providing a commentary and analysis of these latest estimates.

2017 Account

Initially, the aggregate headline numbers for Hampden 2017 Account show an improvement of 0.32 percentage points thanks to over a dozen syndicates improving their forecasts.

The 2017 Account forecasts now stand at between a loss of -6.13% best case to -15.08% worst case, so a mid-point estimate for HAL Members of -10.61%. Freehold syndicates at the top of the attached report generally show a small improvement – syndicates that tend to form the majority of Members’ capacity; once again nuclear syndicate 1176 leads the table for an improved forecast.

Only a few syndicates have posted a deterioration of their estimates, the largest being syndicates Cathedral 2010, Argenta 2121, Brit 2988, Blenheim 5886, Hiscox 6104, Beazley 6107. Once we have further data from each syndicate, the HUR Bulletin will be able to report on these movements in greater detail.

The “Lloyd’s Overall” estimate for the 2017 Account is range between a -7.46% best case to a -13.27% worst case – a slight improvement over the year-end position also.

2018 Account

This year was chiefly impacted by two US-landfalling hurricanes Florence and Matthew, several Japanese losses including typhoon Jebi where losses have deteriorated for the (re)insurers; and, last of the year, the costliest Californian wildfires, and as a result, we published in this year’s April Roadshows and the 6 March 2019 preview letter, our forecast for the year of it being likely to be a 5% loss.

The 2018 Account forecasts stand at between a loss of -1.08% best case to -6.15% worst case, so a mid-point estimate for HAL Members of -3.61%. Some syndicates particularly the catastrophe SPAs 6104, 6107 and insurance catastrophe syndicates 318, 4242/6123, where lines are small, have posted double-digit loss estimates. The liability syndicates QBE 386 and Dale 2525 as well as Chaucer nuclear Syndicate 1176 stand out with their estimates for profits. Syndicates Hiscox 33, Kiln 510, Atrium 609, Beazley 623, Meacock 727 have posted small forecast losses or profits which we hope will improve in the quarters leading up to closure. Verto 2689 has produced a forecast of between +1% to -9% so a midpoint of -4%.

The ”Lloyd’s Overall” estimate for the 2018 Account is a range between -0.69% best case to -6.87% worst case and so a midpoint of -3.78%.

In the case of each of these years of account, Members' actual estimates will vary around the HAL average forecast depending upon their individual portfolios. The estimates are before expenses and prior year development.