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Aug 07, 2023

Atrium Forecasts 2021 and 2022 Years of Account

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Atrium Synd 609 has released an update to 2021 and 2022 forecasts

Latest Forecast Previous Forecast Mid Point Movement
Syn 609 2021 +5.0% to +15.0% +5.0% to +15.0% 0.0%
2022 +5.0% to +15.0% +5.0% to +15.0% 0.0%

Regarding the 2021 YOA, Atrium commented;

"2021 is the year of account that could be most impacted by the possible claims arising out of the western leased aircraft in Russia. This is an extremely complicated situation and one in which the evidential picture is still developing. The following factors: (i) whether the loss is an all-risks (as multiple aviation war insurers are asserting) or war peril loss, (ii) when it occurred, (iii) whether it’s a single loss event or multiple loss events and (iv) how sanctions impact the same, all result in considerably different reserving outcomes to the Syndicate. In arriving at the reserving position for this loss, the financial implications of multiple scenarios have been modelled, taking account of the uncertainties listed above and utilising a probabilistic framework. In arriving at our reserving position, the likelihood of these scenarios occurring was established using expert judgement. This reserve is included within the +5.0% - +15.0% forecast. Due to the nature of the circumstances mentioned above, the potential for variation to the booked reserves is considerably greater than the normal level of reserve sensitivity to downside risk and the actual outcome of the loss could be in a particularly wide range with greater than usual variability."

Atrium further commented;

"All forecasts are shown as a percentage return on allocated capacity after deduction of standard personal expenses, but before members’ agents’ fees. These forecasts are subject to the assumptions listed below and are subject to possible revision. We draw your attention, in particular, to assumptions 1 and 6 below.

1. Inherent volatility in claims development will not give rise to actual ultimate claims which are materially divergent from expectations. In particular there will be no significant distortion in the incidence of major catastrophe or attritional losses or in the ability of the syndicates’ reinsurers to respond to potential reinsurance recoveries;

2. The development of open year premiums will be broadly consistent with historical development patterns;

3. There will be no material change in reserving methodology or accounting policies at the respective dates of closure of the open years;

4. Inflation, interest and exchange rates as at the respective dates of closure of the open years will not differ significantly from those taken into account in the forecasts;

5. There will be no material unbudgeted expenses; and

6. Investment returns will be materially in line with investment manager expectations."