12 April 2017Insurance

Neon seeks to draw line under past after more losses and soaring combined ratio

Neon's Syndicate 2468 has said that the strategic actions it has taken including reserve strengthening and exiting from medical malpractice and general liability classes of business will allow it to draw a line under the past after it posted more heavy losses for 2016 and its combined ratio soared.

The syndicate reported a combined ratio of 217 percent for 2016, driven by a claims ratio which reached 155 percent, and losses of £151.7 million. These figures represented a big deterioration on its 2016 figures when it posted a combined ratio of 138 percent and a loss of £60.9 million.

It blamed the poor results mainly on reserve strengthening, which will allow it to draw a line under the past, it said.

Its gross written premiums in 2016 also shrank to £160 million last year compared with £210 million a year earlier.

The syndicate said that changes made last year, when it also rebranded as Neon from Marketform, “marking the start of an exciting new chapter in the business”.

It said that the outcome of its strategic review, which saw it exit from the medical malpractice and general liability classes of business and strengthen reserves for prior years for these classes, will allow it to now deliver sustainable and profitable performance.

“It now enables Neon to draw a line under the past and focus on the future. Chief executive officer, Martin Reith, and the Group's new leadership team continue to progress with their plans to return the business to profitable growth and become a leading specialist Lloyd's insurer,” the company said.

The company also made some other announcements in its results.

It said its 2007 underwriting year, which previously remained open due to uncertainty over Italian Public Hospitals Medical Malpractice reserves, closed on 15 November 2016 by means of a reinsurance to close (RITC) transaction. The RITC transferred all assets and liabilities to Syndicate 2008.

And it noted that following a review of recent changes in the Ogden discount rates and its exposure to this, it was concluded that the Syndicate was adequately reserved for the change in the rate.

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31 January 2017   Specialist Lloyd's insurer Neon has appointed Michael Wade and Simon Hayes to its managing agency board as non-executive directors.