Hiscox's 2011 forecast reveals reduction for Syndicate 33
Hiscox is set to reduce its capacity for Syndicate 33 by £100m, it said in its initial 2011 business forecast for the syndicate.
Hiscox, which will submit its full 2011 business forecast for Syndicate 33 to Lloyd's by 9th July, said it expects a syndicate capacity of £900m for 2011, a reduction of £100m from 2010.
The insurer said the reduction is driven by anticipated market conditions; however these could change depending on loss activity over the next three months.
A final plan will be submitted to Lloyd's in late September which may involve a change to Syndicate 33's capacity.
Hiscox manages Special Purpose Syndicate 6104 solely on behalf of third party capital providers. Capacity for Syndicate 6104 will remain at £45m for 2011. Hiscox also manages and provides all of the capital for Hiscox Syndicate 3624.
Hiscox said in a statement: "Losses surrounding the Chilean Earthquake are still unfolding however our estimates remain unchanged from our announcement on March 16.
"Based on an insured market loss of $8bn for the Chilean earthquake, and $3bn for windstorm Xynthia, Hiscox has estimated combined net claims of approximately £100m.
"Hiscox’s exposure to the Deepwater Horizon event is also unchanged from our announcement on May 12. For an industry insured loss of up to $2bn we anticipate net claims of less than £10m."
It said rates remain attractive for most reinsurance lines and are broadly stable in specialty areas.
"However we are seeing continued pressure in US property lines. As predicted, the Deepwater Horizon event has turned the offshore energy market where we are achieving average rate increases of 10-15% with improved terms and conditions.
"In offshore energy, liability rates have increased by well over 25%. Many of our clients are also considering higher insurance limits especially for ‘control of well’ and energy liability cover."