Lloyd's SQRs show wide profitability on 2002
Despite general profitability across the Lloyd's market for the 2002 year, with a slight deterioration of 0.05 percent to a projected 12.79 percent profit at the end of the ninth quarter, individual syndicates are still being hit hard as developing losses emerge.
Overall, just 14 of the market's ninety syndicates for the year are projected to make a loss on the 2002 year. The worst performer continues to be Cox corporate Syndicate 1208 with a projected 50.77 midpoint loss on its £54mn capacity. However the estimate reveals the potential for fluctuations through the development of the Lloyd's three year accounting system.
The Syndicate showed a 3.46 percent improvement between Q8 and Q9, but had deteriorated by 9.13 percent from the seventh to eight quarter - after improving 9.07 percent between Q6 and Q7. Cox released a statement on 14 June batting off speculation that Syndicate 1208 was under reserved.
The other worst performers showed little or no change on the previous quarterly projections with Sackville 1173 estimates stabilising in the last two reporting periods after the former Cottrell & Maguire Syndicate slumped 10 percent due to US financial liability loss exposures.
Notable deteriorations at the Q9 stage include Heritage 1245, which has been hit hard by bail bond losses (see p2), resulting in a 12.5 percent slump to a projected 2.5 percent midpoint loss on £44.5mn capacity.
SVB Syndicate 1241 revealed a 9 percent drop in projected earnings to a only just breaking even 0.5 percent profit on its £169mn capacity. The insurer's share price suffered as the news broke and currently sits at just 41p, 23 percent down from a 2004 high of 53.5p.
SVB chief executive Matthew Fosh commented: "We are still hampered by our inheritance. The ability of the poor underwriting of the soft market to hurt us remains and we are still committed to bearing down on these legacy issues. Across the business current underwriting is strong and good progress is being made.”
Bermudian XL backed Syndicate 990 also saw significant deterioration from a projected 8.5 percent profit to just 3.5 percent.
Striding ahead at the top of the performance chart is RJ Kiln's Syndicate 557, which predicts a 38.8 percent profit on its £46.8mn capacity.
Heritage Syndicate1200 improved by 5 percent to an impressive estimated 32.5 percent midpoint profit on its 2002 year £25.9mn capacity, while Advent 780 improved marginally to a 31.29 percent profit on £149.mn capacity, and Ascot's Syndicate 1414 improved 1.73 percent to a projected 30.23 percent of its £269mn capacity.