19 February 2016 Insurance

Challenging conditions force Tokio Marine Kiln to adapt

Tokio Marine Kiln Syndicates has released mainly positive results relating to its three Lloyd’s syndicates but admitted that challenging market conditions have forced it to adapt as a business and Syndicate 308 has been hit by some big claims.

The company revealed that syndicates 510, 557 and 308 each delivered profits for the 2013 year of account and it said that syndicates 510 and 557 are forecast to deliver profits for the 2014 and 2015 years of account.

But Charles Franks, chief executive officer of TMKS, said that current market conditions are challenging and reinforce the need for disciplined underwriting.

“The challenging market conditions we face force us to examine how we need to adapt to ensure we can perform successfully as a business,” Franks said. “The TMK approach has been to get closer to our customers and to further understand their needs. We then look at how we can use innovation, the expertise of our people, and our distribution options to ensure we always have the right products to satisfy the evolving risk requirements of clients.

“These results and forecasts show that this strategy is effective and we will continue to put innovation and customer centricity at the heart of what we do. Finally we will continue to use the enormous stability we benefit from as part of the Tokio Marine Group to retain and attract the very best staff, demonstrated in recent months by adding two new liability underwriters to our team in November and appointing a head of innovation in December.”

The company said that syndicates 510 and 557 each closed the 2013 year of account with the highest return on capacity achieved in recent years, benefiting from a relatively benign catastrophe year, good attritional performance and prior year reserve releases. It added that this represents a strong performance in a year that has seen premium income hampered by tough market conditions and large cumulative foreign exchange losses.

Life Syndicate 308 closed with a small profit, having suffered from reduced premium income and adverse claims experience. It said this is an improvement on the loss forecast in November due to the favourable development of reserves.

Tokio Marine Kiln added that syndicates 510 and 557 have benefited from a relatively benign catastrophe year, and at this early stage the mid-point ranges for the two syndicates indicate that they are both forecast to deliver a profit.

In contrast, Syndicate 308 has had a challenging year having suffered from a series of early losses on key binders.

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