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The following
commentaries have been prepared based on information contained
in the Managing Agents Report and Accounts as at 31 December
2008 and where appropriate interim reports received during the
course of 2008.
_________________________________________________________________________________
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Syndicate: 2 |
Managing Agent: Advent Underwriting Ltd |
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|
Run-Off Manager: Kevin Regan
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|
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Year(s): |
2001 |
2002 |
|
Declared Results |
|
(49.25%) |
16.39% |
|
Cash Calls to date |
|
30.0% |
(4.19%) |
Syndicate 2
closed
the 2001 and 2002 years of account at 31
December 2008.
Names
will be aware that the managing agent had left the 2001 and 2002
years of account open due to the material uncertainties
surrounding the aviation liabilities for the World Trade Center
(WTC), namely the number of events that the WTC loss comprises
for aviation liabilities is not yet determined and the extent to
which property losses can be subrogated against aviation
policies is unknown. However, uncertainty surrounding the
balance of the syndicates non-WTC reserves is reduced.
Advent Underwriting Limited
was of the opinion that Names best interests would be served if
the syndicate could effect a RITC at no additional cost to
Names. Consequently a RITC was agreed with Advent Capital
Holdings plc, the managing agents parent company at no risk
premium based on the reserves held at 31 December 2008.
In respect of the 2001 year
of account, the balance of the outstanding loss, 19.25% and the
remaining surplus of the 2002 year of account, 12.20% will be
due for settlement June 2009.
_________________________________________________________________________________
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Syndicate: 53 |
Managing Agent: Spectrum Syndicate Management Ltd |
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Run-Off Manager: Richard Murphy
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Year(s): |
1998 |
1999 |
|
|
|
|
|
|
|
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Declared Results |
|
(217.70%) |
(67.87%) |
|
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Cash Calls to date |
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202.7% |
67.1% |
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Syndicate 53
was unable to close the 1998 and 1999 accounts at 31
December 2008.
The managing agent has
reported further deteriorations of 53.5% and 2.5% of capacity
for the 1998 and 1999 years of account respectively.
The deterioration in
respect of the 1998 year is particularly severe. During 2008
the syndicate has resolved two major disputes. Firstly, in the
dispute with Hanover, which was held in the UK Commercial Court,
the syndicate expected to win this case, however the Court found
in favour of Hanover. The syndicate has also agreed
commutations on certain other major contracts which were in
dispute. Secondly, the resolution of the Trust Mark and Legion
arbitrations exacerbated the poor result.
In addition the 1998 year
of account also suffered further losses on the Personal Accident
account. The syndicate has written a number of personal
accident contracts in each of the 1998 and 1999 years of account
where the final outcome remains uncertain. However, the
managing agent comments that, following the resolution of the
major disputes the potential volatility in the final outcome has
been reduced.
The 1999 year of account
has seen a small deterioration on the Aviation account and
appears to be settling within its loss projections.
In view of
the significant deterioration in the 1998 year of account and
the major claims since the previous cash call a further cash
call of 45% of capacity will be made for settlement June 2009.
The
Managing Agent is still unable to give a realistic date for
closure.
_________________________________________________________________________________
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Syndicate: 138 |
Managing Agent: Syndicate 138 Agency Ltd |
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Run-Off Manager: Mark Jephcott
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Year(s): |
2000 |
2001 |
|
|
|
|
|
|
|
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Declared Results |
|
(57.41%) |
(20.35%) |
|
|
Cash Calls to date |
|
61.54% |
36.7% |
|
Syndicate 138
closed the 2000 and 2001 underwriting accounts as at 31 December
2008.
Names will be aware from
our Memorandum of 18 December 2008 of the managing agents
intention to secure an economic reinsurance to close at 31
December 2008. This was achieved by an acceptance of a
quotation by the Meacock Syndicate 727 which will result in the
release of a surplus of 4.13% and 16.35% in respect of the 2000
and 2001 year of account respectively to Names June 2009.
_________________________________________________________________________________
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Syndicate: 340 |
Managing Agent: Travelers Syndicate Management Ltd |
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Run-Off Manager: Stephen Eccles
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Year(s): |
2000 |
2001 |
|
|
|
|
|
|
|
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Declared Results |
|
(69.6%) |
(16.1%) |
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|
Cash Calls to date |
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67.7% |
nil |
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Syndicate 340
was unable to close the 2000 and 2001 years of account at 31
December 2008.
Syndicate
340 was a specialist Aviation Syndicate and the 2000 and 2001
years of account have material exposure to losses arising from
the terrorist activities in the USA of 11 September 2001.
The scale and complexity of these losses have resulted in there
being significant uncertainty as to their final outcome: the
uncertainty relates to the extent of liability and the quantum
of possible loss settlements. This situation has
remained unchanged during the course of 2008.
In aviation terms, the events of 11
September 2001 resulted in the loss of four airliners, two at
the World Trade Center, (WTC) one at the Pentagon, and one at
Shanksville, Nr, Pittsburgh, Pennsylvania with significant loss
of life/bodily injuries and ground damage. All but a very small
minority of third party personal claims have now been settled
and further mediation efforts in relation to the remaining
personal injury wrongful death claims are on-going. However,
there continues to be little realistic prospect that the WTC
related third party property damage/business interruption
liability claims against the aviation defendants will be settled
in advance of a major trial. These losses are expected to
exhaust relevant policy limits if it is determined by the Courts
that the aviation defendants are liable. It is currently
expected that the trial of those claims will commence sometime
during the second half of 2010 following on from the protracted
discovery process.
It is for
this reason that the managing agent has extended the realistic
date for closure to 31
December 2012.
The
current mid-point forecast result to the ultimate before members
agents fees is a loss of 69.6% and 16.1% for the 2000 and 2001
years of account respectively.
_________________________________________________________________________________
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Syndicate: 529 |
Managing Agent: Shelbourne Syndicate
Services Ltd |
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Run-Off Manager: A D Elliott
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Year(s): |
1998 |
1999 |
|
|
|
|
|
|
|
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Declared Results |
|
(89.16%) |
(103.53%) |
|
|
Cash Calls to date |
|
103.0% |
113.5% |
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Syndicate 529
was unable to close the 1998 and 1999 years of account at 31
December 2008.
The
managing agent reports that the 1998 account has deteriorated by
6.6% during the calendar year 2008 which was attributable to a
small deterioration in the underwriting account of 2.8% and a
loss on exchange reflecting the movement between the US dollar
and the pound during the year of 3.8%
In contrast the 1999 year of account has
seen an improvement of 7.4% of capacity. The managing agent
reports that the 1999 account had a similar small deterioration
in the underwriting account of 3.19% but a profit on exchange of
in excess of 10% has produced the overall surplus position
during 2008.
It was anticipated that both years of account would close at 31
December 2008 but regrettably quotations in respect of a
potential RITC did not fall within the range that was acceptable
for the managing agent.
It is the
intention to continue with the RITC process during the course of
2009 when it is hoped both years of account will be reinsured at
31
December 2009.
_________________________________________________________________________________
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Syndicate: 566 |
Managing Agent: QBE Underwriting Ltd |
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Run-Off Manager: Jonathan Parry
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Year(s): |
2000 |
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|
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|
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Declared Result |
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(5.4%) |
|
|
Cash Calls to date |
|
---- |
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Syndicate 566
closed the 2000 account at 31 December
2008.
The 2000 year of account
was left open due to the material uncertainties surrounding the
aviation World Trade Center (WTC) losses of 11 September 2001.
While uncertainties continue to remain, particularly with
regards the potential for subrogation by property insurers
against aviation insurers there have been sufficient positive
developments in 2008 for the managing agent to warrant a review
of the reinsurance to close options. These options concluded
with the acceptance of a proposal by QBE’s wholly aligned
Syndicate 2999 which will result in a release of 5.4% of
capacity in June 2009.
_________________________________________________________________________________
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Syndicate: 957 |
Managing Agent: Duncanson & Holt Syndicate Management
Ltd (CMGL) |
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Run-Off Manager: David McElhiney
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Year(s): |
1997 |
1998 |
1999 |
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|
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Declared Results |
|
(12.59%) |
(65.36%) |
(109.67%) |
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Cash Calls to date |
|
32.89% |
76.98% |
124.6% |
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Syndicate 957
was unable to close the 1997, 1998 & 1999 years of account at 31
December 2008.
Syndicate 957 wrote
mainly accident and health and aviation business both on a
direct and excess of loss business. The account also includes
medical expenses and a small amount of satellite business. It
wrote through consortia common open market slips, binders and
reinsurance.
The managing agent reports that all run-off
years of account have seen an improvement on the results
reported at 31 December 2007 mainly
due to exchange rate differences. However, all three years saw
an improvement in investment income and reductions in bad debt
and claims handling provisions. This was particularly relevant
to the 1997 account which has reduced its full cost loss by over
12 percentage points.
Regrettably the managing
agent has not commented on a likely date for closure but it is
hoped they will be in a position to seek a reinsurance to close
at 31 December 2009.
_________________________________________________________________________________
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Syndicate: 991 |
Managing Agent: Capita Managing
Agency Ltd |
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Run-Off Manager: Harvey Simons
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Year(s): |
1998 |
1999 |
2000 |
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Declared Results |
|
(26.64%) |
(42.78%) |
(40.56%) |
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Cash Calls to date |
|
48.14% |
36.9% |
35.7% |
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Syndicate 991
was unable to close the 1998, 1999 & 2000 years of account at 31
December 2008.
The
managing agent reports a deterioration in the underwriting
result, for 1998 account, mainly due to the general liability
and motor accounts and this was partly off-set by calendar year
investment income and favourable rates of exchange differences
which reversed the deficit position to the slight surplus
reflected in the above declared result. The 1999 year of
account saw very little movement in the underwriting result and
the small surplus achieved was generated by calendar year
investment income and a reduction in the bad debt provision.
The 2000 year of account deteriorated by 2.24% which was only
partially off-set by calendar investment income and favourable
rate of exchange differences. The deterioration was
experienced on the long tail account particularly the general
liability and motor accounts.
The managing agent is seeking to close all three years of
account at the same time. Names will be aware from
previous Newsletters that the 1998 year of account remains open
in spite of efforts to achieve closure, pending the outcome of a
dispute with the liquidator of one of the
syndicates reinsurers. This dispute is still subject to
legal proceedings in Australia and until now, the board has
considered that it has not been possible to close any of the
three open years until its resolution. We understand that CSML will seek quotations to effect a RITC during 2009 when it
is hopeful that an acceptable quotation will be obtained to
close all three years whether the dispute concerning the 1998
account is settled or not.
_________________________________________________________________________________
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Syndicate: 1007 |
Managing Agent: Novae Syndicates Ltd |
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Run-Off Manager: Jonathan Butcher
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Year(s): |
2002 |
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|
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|
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Declared Results |
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(10.3%) |
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Cash Calls to date |
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8.5% |
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Syndicate 1007
was unable to close the 2002 year of account at 31 December 2008.
The reasons for putting the
year of account into run-off included uncertainty over the
eventual outcome on casualty treaty business and in respect of
certain high profile US issues involving investment banks.
Lesser uncertainties include US comprehensive, general liability
business transacted in conjunction with US direct property
business and a modest amount of reinsurance exhaustion which had
the potential to become more pernicious under certain
circumstances. Collectively these factors produce material
uncertainty and hence the inability to close the syndicate at 36
months.
Since then the uncertainty
surrounding some of these issues has diminished considerably.
This has included a reduction in uncertainty surrounding
casualty treaty business following a concerted action to deal
with this issue, including some useful reinsurance commutations.
Although the syndicate has
made progress on certain issues there is still major concern
over the outcomes in prospect in respect of high profile US
issues regarding investment banks. During the calendar
year 2008 deterioration has occurred which has resulted in the
declared result being increased to a loss of 10.3% the
deterioration outweighed other instances of favourable
development.
The managing agent has not
commented on the likely date of closure.
_________________________________________________________________________________
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Syndicate: 1047 |
Managing Agent: Argenta Syndicate
Management Ltd |
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Run-Off Manager: Duncan Wilkinson
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Year(s): |
2000 |
2001 |
2002 |
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Declared Results |
|
(188.0%) |
(67.56%) |
(23.65%) |
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Cash Calls to date |
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198.75% |
70.0% |
29.0% |
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Syndicate 1047 closed the 2000, 2001 and 2002 years of account at 31
December 2008.
Argenta Syndicate
Management Limited successfully closed the above run-off years
of account and their resultant surpluses will be due for
settlement in June 2009.
_________________________________________________________________________________
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Syndicate: 1101 |
Managing Agent: Duncanson & Holt Syndicate Management Ltd
(CMGL) |
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Run-Off Manager: David McElhiney
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Year(s): |
1997 |
1998 |
1999 |
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Declared Results |
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(33.81%) |
(89.47%) |
(66.63%) |
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Cash Calls to date |
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49.4% |
92.6% |
62.6% |
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Syndicate 1101
was unable to close the 1997, 1998 and 1999 years of account at 31
December 2008.
The 1997 year of account
has seen an improvement during the calendar year 2008 which
primarily stems from the reduction in the estimated ultimate
claims in the Professional Indemnity account and an increase in
the investment income. These improvements were partially
off-set by a small deterioration on the Syndicates Accident and
Health account and an increase in the claims handling provision.
Both the 1998 and 1999
years of account deteriorated during 2008 the deterioration
stems from an increase in the estimated ultimate claims on the
Accident and Health account, largely from adverse development on
four reinsurances of US companies. The 1999 account also
saw an increase in the syndicates reinsurance of bad debt and
claims handling provisions.
As can be seen from the
above the uncertainty on the Accident and Health account affects
all three open years, in addition the continuing volatility on
the Professional Indemnity account is on the 1999 year.
These two key elements are affecting the managing agents ability
to obtain an economic RITC quotation.
The
managing agent has not given any indication when the syndicate
is likely to close, although it is hoped closure could be
achieved at 31 December 2009.
_________________________________________________________________________________
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Syndicate: 1121 |
Managing Agent: Spectrum Syndicate Management Ltd |
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Run-Off Manager: Richard Murphy
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Year(s): |
1998 |
1999 |
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Declared Results |
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(86.16%) |
(69.9%) |
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Cash Calls to date |
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75.9% |
66.8% |
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Syndicate 1121 closed the 1998
and 1999 accounts at 31
December 2008.
Names will be aware from our
Memorandum of 22 December 2008 that the managing agent was
proposing to accept a quotation by the Shelbourne Syndicate to
close both years of account at 31 December 2008. The RITC
was successfully concluded and the balance of the loss
outstanding will be called for settlement in June 2009.
_________________________________________________________________________________
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Syndicate: 1171 |
Managing Agent: Ridge Underwriting Ltd |
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Run-Off Manager: Terry Adams
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Year(s): |
1998 |
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Declared Results |
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(14.0%) |
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Cash Calls to date |
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16.8% |
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Syndicate 1171 has been
unable to close 1998 account at 31
December 2008.
The managing agent has
reported that the 1998 account achieved a surplus of
approximately 1.2% during the calendar year 2008 increasing the
overall surplus to 2.8%.
Syndicate 1171 is a Life
Syndicate and can only be reinsured under Lloyd's current
regulations into another Lloyd's Life Syndicate as there are
only three Life Syndicates trading at Lloyd's the opportunities
are very limited to complete a RITC.
_________________________________________________________________________________
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Syndicate: 1173 |
Managing Agent: Argenta Syndicate Management Ltd |
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Run-Off Manager: Duncan Wilkinson
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Year(s): |
1999 |
2000 |
2001 |
2002 |
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Declared Results |
|
(90.0%) |
(65.0%) |
(35.0%) |
(35.0%) |
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Cash Calls to date |
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90.0% |
69.0% |
56.0% |
33.0% |
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Syndicate 1173
closed the 1999, 2000, 2001 and 2002 years of account
at 31 December 2008.
Names will be aware from our Memorandum of
9 December 2008 advising that the
managing agent intended to close the above run-off years of
account as at 31 December 2008.
The managing agent has confirmed that the above run-off years of
account was successfully reinsured with RITC Syndicate
Management Limited. The surpluses in respect of the 2000
and 2001 years and the small deficit in respect of the 2002 year
of account will be due for settlement June 2009.
_________________________________________________________________________________
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Syndicate: 1204 |
Managing Agent: Spectrum Syndicate Management Ltd |
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Run-Off Manager: Richard Murphy
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Year(s): |
1997 |
1998 |
1999 |
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Declared Results |
|
(43.8%) |
(114.3%) |
(102.2%) |
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Cash Calls to date |
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47.7% |
126.2% |
100.4% |
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Syndicate 1204 closed the 1997, 1998 and 1999 years of account at 31 December
2008.
Names
will be aware from our Memorandum of 6 January 2009 of the
managing agents intention to secure an economic reinsurance to
close at 31 December 2008. This has been achieved by an
acceptance of a quotation by Centrewrite Limited, which will
result in the surpluses for the 1997 and 1998 account and the
small deficit in respect of the 1999 account being settled in
June 2009.
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