Lloyd's managing agency Wellington Underwriting Agencies said its forecasts for the 2002 and 2003 years of account are unchanged at the end of the second quarter.
For the 2002 year of account, the forecast for Composite Syndicate 2020 is 10% to 15%, with Wellington having a 46% share of the £624.2m capacity.
This year and its prior year reserves continue to develop well and in line with expectations, said Wellington. As of 30 June 2004, the 2002 year of account had a gross incurred loss ratio of 34%.
For the 2003 year of account, the forecast remains at 11% to 18%, with the company having a 56% share of the £699.1m capacity.
Wellington said the year continued to develop well, with low claims frequency producing a gross incurred loss ratio at 30 June 2004 of 19%, the lowest at this stage of development.
For the 2004 year of account, Wellington said the syndicate had benefited form excellent trading conditions during the first half of the year.
“Consistent with the trading statement issued on the 9 of June 2004 our rating index shows a 2% reduction in rates to end July compared with 12 months ago with rates remaining at levels significantly above the last peak of the cycle,” said the managing agency.
“Underwriting terms and conditions such as deductibles and policy form language remain favourable.
“While too early to have an exact assessment of our exposure to Hurricane Charley, on the basis of information to date, our current assessment is that it will not have a material impact on the syndicate.”
Capacity for 2005 is set to remain at £730m, although Wellington said the underlying business mix has shifted in order to write less business in areas where rates are decreasing and write more business in those areas where rates remain strong.
The change will include new lines of business which meet its profitability targets, said the company.
Wellington said it expected its property treaty business to make a growing contribution as the team headed by the recently recruited Will Curran starts to build its book.
Wellington is also seeing profitable growth in the UK commercial account, through the strengthening relationship with Folgate, the company said. The accident and health account, with the new team in the US, is also developing well.
“Although still formally to be confirmed by Lloyd's, we expect that in 2005 syndicate 2020 will again operate on the minimum solvency ratio of 40%, demonstrating the diverse spread of business written by the syndicate, and allowing capital providers and shareholders maximum leverage for their capital.”
