Lloyd's insurer Hiscox said its forecasts for the 2001, 2002, and 2003 years of account for Syndicate 33 remained unchanged at the end of the second quarter of the year.
Hiscox said the three years continued to develop in line with expectations, but that the forecasts were unchanged from those reported at the end of the first quarter of the year.
For the 2001 year of account, the forecast is a loss of 17.5% to a loss of 22.5%, on a capacity of £360m, of which Hiscox has a 53% share.
For the 2002 year of account, the forecast is 22.5% to 27.5%, on a capacity of £504m, of which Hiscox has a 55% share.
For the 2003 year of account, the forecast is 12.5% to 17.5%, on a capacity of £842m, of which Hiscox has a 65% share.
Syndicate 33 has a capacity of £847m for the 2004 year of account, and £725m for the 2005 year of account, of which Hiscox has a 65% share for both years.
Hiscox said: “The main reason for the reduction [in capacity] for 2005 is the weakness of the dollar as approximately 70% of the Syndicate's business is written in US dollars.
“Otherwise, in the normal course of disciplined underwriting, there is trimming of the account as some rates settle back from their very high levels.”
The Lloyd's insurer said rates remained at a profitable level for the classes of business that it underwrites, although it said there was some reduction in the property area, particularly among the Fortune 500 assureds.
“Also, very surprisingly, there are some reductions in directors' and officers' insurances in the US, but this is a very small business for us and will become smaller,” said the company.
It also said reinsurance rates were, in the whole, remaining firmer than insurance rates.
Looking at possible losses from the damage caused by Hurricane Charley in the US, Hiscox said it was too early to have a complete picture of its exposure to the disaster. But it said that, on the basis of information currently available, “our current assessment is that it is within our budgeted loss ratios”.
Hiscox chief executive Bronek Masojada said: “The underwriting business continues to show good profits. Our focus will remain on quality not quantity. When rates surged unnaturally high, a rapid increase of our capacity was right.
“Now, as some rates reduce from a very high peak, we believe it is the right time for us to maintain discipline. We are determined to make good returns throughout the cycle.”
