SRL Continuity Opinion Changes: Lloyd’s Syndicates (ANV Syndicates, Cathedral, MS Amlin)

LONDON--()--Syndicate Research Limited (SRL)

Actions July - September 2016:

ANV syndicate 779:

September 1 2016 – B^ (Average), negative outlook, Continuity Opinion of Lloyd's syndicate 779 (ANV Syndicates Limited) downgraded to B-^ (Below Average) in light of the syndicate’s open year performance and the headwinds faced in developing a restructured book in the current market.

The outlook for the CO remains negative, reflecting SRL’s view of the potential integration risks associated with the proposed acquisition in H2 2016 of the ANV Syndicates’ operations by AmTrust Financial Services (which owns AmTrust at Lloyd’s managing agency) at a time when the syndicate is re-orientating its account.

Cathedral syndicate 2010:

September 8 2016 – B+ (Above Average), under review for possible downgrade, Continuity Opinion of Lloyd's syndicate 2010 (Cathedral Underwriting Limited) downgraded to B (Average).

This followed the announcement that the syndicate’s active underwriter since February 2016 is stepping down for 2017 and following the resignation earlier in 2016 of the syndicate’s previous active underwriter and three of the syndicate’s senior underwriters, responsible in total for over 85% of the syndicate’s underwriting. The outlook for the CO is stable.

Lloyd’s Interim Results

Lloyd’s Interim result of 13.9% Net Premium Earned (NPE) was underpinned by an increase in investment returns from 3.4% to 10.9% NPE and an exchange gain of 2.9% NPE following the Brexit vote.

Following limited loss incidence and enhanced prior year releases in the last few years, SRL considers the 98% combined ratio is more reflective of current market conditions. As noted by Lloyd’s, the investment returns and forex gains following the European Referendum are not representative of sustainable profitability.

Material differences in profitability remain at the individual syndicate level. 2015 full-year results ranged from losses of over 155% NPE to profits of over 30% NPE for non-catastrophe syndicates.

Syndicate Research Limited (SRL) provides independent research on all active syndicates trading at Lloyd’s. SRL’s Continuity Opinions are opinions on individual Lloyd’s syndicates’ relative, potential continuity prospects for policyholders.

In October 2014 SRL took on the rights to the Continuity Opinions previously offered under Moody’s Analytics Lloyd’s Market service.

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