The cut-off for the top quartile in 2023 was a CR of 81% – significantly lower than the mark of 87% required in the prior year. There were 20 in this group among the 79 non-life syndicates which met the criteria for this analysis, which excludes life syndicates, RITC syndicates, SPAs and syndicates which were in run-off during the year.
A number of historically consistent performers again ranked near the top of the market’s combined ratio leaderboard last year including Chaucer 1176 (37%) and Ive 2525 (75%). Chaucer and cat-heavy Nephila 2357 (26%) traded first and second place between 2022 and 2023.
But eight of the 2023 top quartile’s 20 syndicates managed to move up from one of the poorer-performing cohorts in 2022. Ariel Re 1910, Lancashire 2010 and Blenheim 5886 each improved their underwriting performance enough to move all the way from the bottom quartile in the prior year to the top cohort this year.
Between 2021 and 2022, by contrast, there was more consistency in the top quartile: 13 of 19 syndicates ranked in that cohort in both years, with only six moving up from the second, third or fourth quartiles.
Last year also saw one syndicate – SA Meacock 727 – fall all the way down from the first to the fourth quartile within a single year. No syndicates had fallen this far between 2021 and 2022.
Three syndicates – Beat 4242, Westfield 1200 and Ark 3902 – dropped from the first quartile in 2022 to the third in 2023, and a further three – Aspen 4711, Lancashire 3010 and Apollo 1971 – dropped from the first to the second. Beazley 3623, which also ranked in the top quartile in our 2022 analysis, was dormant during 2023.
In all, 53 of the 73 non-life Lloyd’s syndicates which were active in both 2022 and 2023 improved their annual combined ratio year on year – equivalent to 73% of the market.
This is a more stable picture than in the prior year, when, despite favourable overall underwriting performance, only 56% of such syndicates reported a combined ratio improvement between 2021 and 2022.
A hard reinsurance market benefitted syndicates with significant exposure to this segment. Newer syndicates such as Volante are typically expected to make larger underwriting gains as their premium earnings mature, but other more established syndicates were fast-improving.
Among syndicates which wrote at least £100mn in GWP during 2023, Ariel Re 1910 reported the biggest improvement in percentage-point terms: its ratio decreased from 106% in 2022 to 48%.
In its annual report, the syndicate noted that it was able to “take advantage of the highly attractive market conditions for profitable growth” – particularly in property catastrophe – with overall GWP growth of 16% significantly outstripping the growth of its underlying exposure.
Lancashire 2010 – which, like Ariel Re 1910, moved up from the fourth to the first quartile – reported the third-largest combined ratio improvement year on year, decreasing from 115% to 76%.
On a line-by-line basis, Syndicate 2010 improved its underwriting performance most significantly in non-marine reinsurance – the line which includes its cat-exposed reinsurance business. In that segment, its net loss ratio improved from 129% in 2022 to 55% in 2023, with changes to negotiated attachment levels meaning that its product “moved toward one of balance sheet protection rather than an earnings protection for buyers”.
Other notable year-on-year improvements were recorded by QBE 2999, which decreased its CR from 98% to 79% and MAP 2791 (95% to 77%). In his foreword to the annual accounts, Christopher Smelt – Syndicate 2791’s new active underwriter – noted that the “broad-brush” approach taken by its competitors to drive up pricing and tighten terms has provided MAP with opportunities.
Heading in the opposite direction in the combined ratio league table, four syndicates which wrote at least £100mn in GWP reported a year-on-year increase of 10 percentage points or more: SA Meacock 727, Beat 4242, Westfield 1200 and Aspen 4711.
As noted above, all four of these syndicates dropped out of the top quartile in 2023.
Liberty 4472 – the ninth-largest syndicate by GWP – was one of just two syndicates which wrote more than £1bn of premium in 2023 and also reported a deterioration in its combined ratio. Hiscox 33 was the other syndicate to do so; the other 13 in this size cohort all improved their CR year on year.
The syndicate’s improved catastrophe loss ratio was more than offset by prior year reserve strengthening which Liberty said was driven by “claims development and allowance for the uncertain risk environment”.
Liberty is one of the (re)insurers involved in the ongoing legal dispute over aviation losses relating to Russia’s invasion of Ukraine.
Also affected by the conflict is Atrium 609, which reported a 2023 combined ratio which was 7.3 points higher than in the prior year. In its latest set of published accounts, it almost doubled its Ukraine aviation loss reserves impacting prior years. The firm pushed gross reserves to £265mn – up from £138mn – and net reserves from £39mn to £85mn.
In aggregate across all syndicates, loss development from the war in Ukraine drove prior-year strengthening of specialty reinsurance reserves by 5.6%.
You can review a summary of selected performance measures for all Lloyd’s syndicates on our website here
Insurance Insider delivers global wholesale, specialty, and (re)insurance Intelligence that enables you to act first. Redeem your complimentary 14-day trial for more premium content from Insurance Insider.
Scan here to download the app