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Chaucer nuclear Syndicate 1176 makes 2011 turnaround

Chaucer's nuclear Syndicate 1176 has lifted its forecast mid-point result for the 2011 year of account from a predicted 7.5 percent loss to a 7.5 percent profit.

The syndicate - historically one of the most profitable at Lloyd's relative to its modest size - staged the biggest turnaround in the latest set of quarterly projections published by Lloyd's on 14 August.

It raised its predicted range from a 17.5 percent loss to 2.5 percent profit up to a 0 to 15 percent profit.

It also improved its projection for the 2012 year of account, as its mid-point profit forecast moved up from 30 percent to 35 percent.

The minnow syndicate has a capacity of £31.6mn and a longstanding history of market-leading profitability at Lloyd's. However, potentially lumpy claims that number only a handful in any given year can make for occasionally volatile results.

The Chaucer-managed outfit was one of a panel of carriers that provided coverage for Tokyo Electric Power Company, the owners of the Fukushima Dai-ichi nuclear plant involved in the 2011 Tohoku quake disaster.

However, the Lloyd's (re)insurer said at the time that Syndicate 1176 did not provide property or business interruption cover to the affected plant and that liability losses would be excluded.

Overall, non-aligned Lloyd's syndicates have improved their projections for both 2011 and 2012, delivering a mid-point profit forecast of 4.79 percent and 6.71 percent respectively, up from 4.08 percent and 5.84 percent three months ago.

Non-aligned syndicates - which use traditional Names capital - outperformed corporate-funded syndicates in both years.

For the 2011 year of account, wholly aligned syndicates increased their projected results slightly from a mid-point loss of 0.19 percent to a profit of 0.64 percent on £17.2bn of capacity.

For 2012, the average profit forecast moved from 4.26 percent to 4.36 percent, despite losses from Superstorm Sandy.

Under the Society's three-year accounting system, premiums and claims are associated with the accident year in which the policy incepts.

Performance varied among the three heavyweight non-aligned syndicates, with MAP's Syndicate 2791 comfortably outperforming the average benchmark in both years. Meanwhile, Kiln Syndicate 510 underperformed in 2012 and Hiscox's flagship Syndicate 33 fell below average for both years.

MAP's £500mn-stamp Syndicate 2791 held its 2011 estimate steady at 11.5 percent and slightly increased its forecast for the 2012 year of account to 8.5 percent.

Kiln Syndicate 510 improved slightly on its previous forecast, estimating a mid-point profit of 7.62 percent, or £70.28mn, for the 2011 year of account. However, the syndicate is still expected to underperform in 2012 with a mid-point result of 3.77 percent, equal to £40mn.

Hiscox's Syndicate 33 predicted a 2.5 percent profit for the 2011 year of account on a stamp of £900mn, and a 5 percent profit for the 2012 year of account on capacity of £950mn, unchanged from previous forecasts.

Unsurprisingly, the worst performer for 2011 was beleaguered Equity motor Syndicate 218, which predicted a 16 to 6 percent loss, down from the previous loss estimate of 12 to 2 percent.

The forecast for Syndicate 218 also worsened for the 2012 year of account from break-even to a mid-point 2.5 percent loss.

The small Sportscover Syndicate 3334 also underperformed in 2011, decreasing its estimate to a 7.2 percent loss.

But QBE Syndicate 386 still leads on 2011 year of account performance with a steady forecast of a 23.8 percent profit on £364mn stamp.

MAP's Special Purpose Syndicate 6103 also did well with a predicted mid-point profit of almost 20 percent in both years of account. Another outperformer was Amlin's £35mn-stamp Special Purpose Syndicate 6106, which forecast a profit of 43 percent in the 2012 year of account.

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