Syndicate goes into run off as remediation efforts fail

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Lloyd’s of London said it will continue to purge the market of business it believes is not delivering

Coverys Managing Agency has announced it is to place one of its syndicates into run off as the clampdown by Lloyd’s on underperforming business continues to bite.

The managing agency is to cease the operation of its DTW Syndicate 1991 which writes business on a binding authority basis. Under the move the syndicate will cease to accept new and renewal business with effect from 31 December 2020.

It comes as Lloyd’s has said it will continue to look to purge the market of business which it believes is not delivering the performance, they it deem is sustainable as the market looks to redefine its future operations.

Speaking when the market delivered its interim results Lloyd’s chief executive John Neal made it clear that the market would continue to focus on poorly performing business.

“Although the indications suggest we are returning to profitability, our focus on performance must remain unerring, Neal said.

“As we enter the 2021 business planning cycle, against the backdrop of an uncertain global economic outlook, there has never been a more crucial time for business and capital plans to be well executed to ensure we return the market to profitability on a sustainable long-term basis.”

’With great regret’

Robin McCoy, chief executive at Coverys Managing Agency Limited, said: “It is with great regret that Coverys Managing Agency has notified Lloyd’s of its intention to put Syndicate 1991 into run off.

“Every effort has been made to implement remediation measures on under performing business over the past few years, however, the results have not improved sufficiently to deliver a sustainable and long-term profitable outcome.”

DTW1991 is a specialist syndicate focusing on the Lloyd’s Binding Authority market. Its focus has predominately been in the provision of property, liability, and specialist sports and leisure products to mainly SMEs in the US and the UK. It also operates in a number of other territories including Canada, Australia, and Europe.

Coverys said the Syndicate works with “a limited number of carefully selected brokers and cover holders”.

It leaves Coverys with two diverse syndicates still in operation.

It will continue to manage speciality medical professional lines Syndicate 1975 and Syndicate 3330.

The syndicate is a specialist run-off vehicle formed to accept the reinsurance to close (RITC) of orphan syndicates. As yet it has not been announced whether Coverys will use Syndicate 3330 to manage the run off of 1991.