General Insurance Article - Aon Benfield launches Lloyd's Update report


Aon Benfield Analytics’ Market Analysis team today launches the latest edition of its Lloyd’s Update report, which assesses the 2014 financial performance and latest developments in the Lloyd’s market.

 Key findings include:

     
  1.   The Lloyd’s market began 2015 with 92 active syndicates and slightly reduced underwriting capacity of GBP26.0 billion.
    2.  
  2.   This includes over GBP0.5 billion of ‘sidecar’ quota share capacity provided by 14 Special Purpose Syndicates (SPSs).
    3.  
  3.   Eight Lloyd’s managing agents now oversee more than GBP1.0 billion of capacity, namely Catlin, Tokio Marine Kiln, Beazley, Hiscox, Amlin, QBE, Brit and Liberty.
    4.  
  4.   Including sidecar support, the capacity of the ten largest syndicates aggregates to GBP11.1 billion in 2015, or 42% of the total market. Average syndicate capacity stands at GBP331 million.
    5.  
  5.   China Re Syndicate 2088, a former SPS, now operates on a standalone basis and April 1, 2015 saw the launch of a new operation, Syndicate 1884, backed by The Standard Club.
    6.  
  6.   SPSs continue to be a popular entry route for new and existing investors, with four new vehicles established so far in 2015. Backers include Credit Suisse Asset Management and Korean Re.
    7.  
  7.   Four Lloyd’s operations gained new owners in the first half of 2015 (Ariel Re, Brit, Catlin and Sportscover) and three further deals await customary approvals (Pembroke, Montpelier and HCC).
    8.  
  8.   Gross premiums written totalled GBP25.3 billion in 2014, up 2% at constant exchange rates. Reinsurance volumes fell by 10% to GBP8.5 billion, driven by lower property catastrophe pricing.
    9.  
  9.   Underwriting profit of GBP2.3 billion (2013: GBP2.6 billion) equated to a combined ratio of 88.1% (86.8%). Prior year reserve releases were stable at GBP1.6 billion, providing 8.0pp of benefit.
    10.  
  10.   The total investment return rose by 25% to just over GBP1.0 billion in 2014, a yield of 2.0% (2013: 1.6%), driven by unrealized gains on longer duration bonds.
    11.  
  11.   Overall operating performance remains strong. Pre-tax profit was almost unchanged at GBP3.2 billion in 2014, representing a return on capital employed of 14.7% (2013: 16.2%).
    12.  
  12.   Overall net resources (capital, reserves and subordinated liabilities) grew by 11% to a record level of GBP23.5 billion at December 31, 2014.
    13.  
  13.   Lloyd’s has been liaising closely with the UK regulators over its preparations for the implementation of the Solvency II regime and these are nearing completion

 To read the full report please click on the document below

  

 

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