Nearly 1 in 4 Lloyd’s syndicates beat 80% CoR; even start-ups hit profit
Nearly a quarter of Lloyd's non-life syndicates managed a combined ratio in 2023 below the 80% mark, a dataset compiled by the Lloyd's Market Association (LMA) and Insurance Capital Markets Research (ICMR) indicated.
“In 2023 nearly all syndicates reported a pre-tax profit, unlike in any year since 2015,” analysts wrote of aggregate results for active non-life syndicates.
18 of 76 listed active non-life syndicates beat the 80% bar amongst 76 listed. Another 34 fell between 80% and 90%, another 33 between 90% and the break-even 100%.
Even newcomers often managed an underwriting profit. The average combined ratio of 11 stat-ups of less than five years snuck past the bar at 97.1%, even though five of the nine syndicates with underwriting losses are in the start-up category.
“Given the extra costs and capital loadings usually applied to start up syndicates, the charts show that 2023 was clearly a good time to commence underwriting,” report authors from LMA and ICMR claimed.
It's easily the smallest proportion of syndicates with underwriting losses in recent history, a graph of combined ratio distributions since 2015 indicated. Nearly half of the fifth quintile of syndicates showed an underwriting gain. The break-even point was well into the fourth quintile in 2021 and bordered on the second quintile in 2020. 2017 saw over 80% of syndicates in the red.
The four classes of business - reinsurance, property, casualty and specialty - delivered gross underwriting profits between two and five times their prior year level.
Mark casualty gross underwriting profits up 2x to nearly £2.1 billion. Reinsurance and primary property are up 4x to £5.4 billion and 4.2 billion respectively. Specialty is up over 5x to £1.7 billion.
Measured by pre-tax results, Bazley 2623 tops the charts for the second year, followed by QBE 2999 which had been out of the top ten for the prior two years. Chaucer 1084 has risen in fits over the past five years to the #3 spot, followed by Hiscox 33 which has held a place on the podium for the past three years.
Ariel Re 1910 with an eye-opening combined ratio of 47.6% continued the rankings, followed by MS Amlin 2001, BRIT 2987 and Nephila 2357 with a best-in-class combined ratio of 25.5%. A single award for a single-digit loss (not combined) ratio went to Chaucer 1176.
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