Lloyd’s insurer and Argo Group subsidiary ArgoGlobal yesterday (September 2nd) announced plans to exit most of its hull underwriting business within Syndicate 1200. It said that recently recorded combined ratios were unsustainable.
Matt Harris, group head of international operations, said that “this is another step in our overall drive to increase profitability”, adding that “it is important to note; however, we are fully committed to the remaining marine classes we insure and insuring hull on non-Lloyd’s platforms.”
Argo said that Syndicate 1200 hull underwriting represented less than 3% of gross written premium in 2018. The company said that it would consider writing certain hull risks on a limited basis through Syndicate 1200 from Dubai. The syndicate already exited from the yacht market earlier this year. Syndicate 1200 will also exit underwriting operations in Asia. All existing policies remain valid and the company will manage claims handling through its London operation.
Harris said that “over the past two years, we’ve taken deliberate steps to improve profitability in Syndicate 1200 and ultimately enhance shareholder value. We’re executing this through underwriting actions, increased rates, and a focus on digital technology to improve underwriting margins. The ArgoGlobal Syndicate 1200’s Asia business recently recorded combined ratios are unsustainable and, whilst we still see growth opportunities in the region, we need to prioritize our efforts on profitable growth in other markets”. The Asia business accounted for less than 3% of Syndicate 1200 gross written premium in 2018.
The company said that these announcements would have no impact on Argo Group’s Ariel Re Syndicate 1910 business, including its growing Hong Kong-based renewable energy business.
Syndicate 1200 (Active underwriter S G Eccles) GWP in 2018 were £589.2m (from £552.6m in 2017). That would put hull business at less than £18m, according to Argo’s announcement. There was a loss of £35.9m in 2018, compared to a £112.3m loss the previous year. The combined ratio decreased from 131.8% to 107.7%.
In response to the events of 2017 the syndicate saw rate increases in short tail lines of business where it was most needed. However, Chairman Tony Latham said in the syndicate’s annual report that “rates did not return to a level commensurate with the risks being presented”.
Source: Insurance Marine News