SRL changes Hiscox Syndicate 33 outlook to 'negative'

Syndicate Research Limited (SRL) has changed the outlook of Hiscox's Lloyd’s Syndicate 33 to negative from stable in light of its recent performance.

Hiscox syndicate 33 is a non-marine, short-tail orientated syndicate 72.5 percent backed by Hiscox and 27.5 percent by third party support, which operates within the Lloyd’s of London insurance market.

Syndicate 33 recorded a loss of 2 percent of net premium earned (NPE) on an annually accounted basis for 2019 on a combined ratio of 108 percent.

SRL said that the syndicate had performed in line with lower end A- (Good) benchmarks in terms of indicative average annual returns on capital on a cross-cycle basis.

However, with more recent 5-year indicative average annual returns on capital aligning the syndicate’s overall scorecard assessment with the top of the A- (Good) peer group, SRL has changed the outlook reflecting its view of relative performance and continuity prospects for the syndicate over the insurance cycle.

On a cross-cycle basis Syndicate 33 had recorded an average profit of 17 percent of NPE for 2011 to 2019 under annual accounting and more recent 5-year average profits of 13 percent NPE.

SRL noted the reduction in personal and commercial binding authority business and the realignment of the Directors & Officers liability book in recent years, together with improvements in underwriting conditions on the retained book.