Insurer's plans could change if rates alter
Lloyd’s insurer Hiscox plans to cut capacity at Syndicate 33, its main Lloyd’s operation, by £100m for the 2011 underwriting year as a result of the expected pricing environment in the London market.
Hiscox said in its initial 2011 business forecast for Syndicate 33 that it envisaged syndicate capacity for the year would be £900m, down from £1bn in 2010.
“Hiscox is able to expand and shrink its syndicate capacity depending on opportunities in the London market. At this stage, we believe we will be shrinking capacity slightly, and focusing on growth in our regional businesses in Europe and the USA,” Hiscox spokesperson Kylie O’Connor said. “This could very well change, however, if loss activity in the next few months creates a different rating environment.”
The insurer plans to submit a full business forecast for the syndicate to Lloyd’s by 9 July. A final plan will be submitted to Lloyd’s in late September.
Hiscox expects that the bulk of Syndicate 33’s £900m capacity will come from its dedicated corporate member. Some £198.48m will come from members’ agents that are not part of pooling arrangements, while £46.2m will come from members agents’ pooling arrangements. The remaining £2.82m will come from other direct corporate sources.
The insurer forecasts that it will write £879.1m of gross premium in 2011 on the back of its capacity.
In addition to Syndicate 33, Hiscox manages special purpose Syndicate 6104 solely on behalf of third-party capital providers, for which 2011 capacity will remain unchanged at £45m.