Listed Lloyd's insurer Hiscox has raised its 2001 loss estimate for Syndicate 33 due to an increase in the reserves for its World Trade Centre loss.
The company said it decided to increase the reserves for the WTC loss to the current level of notifications of $588m, from the previous reserves of $475m. This increases Hiscox's reserves for WTC to £80m.
The company has revised the loss estimate for 2001 to a range of 17.5%-22.5% of Syndicate 33's £360m capacity, from the previous 5%-10%.
"Claims continue to settle lower than the notifications level, however they are taking longer to settle than we anticipated and we wish to rid ourselves of any perceived uncertainty as to the level of WTC reserves," Hiscox said in a statement.
"We continue to take no account of subrogation though we believe that this will produce a significant pay-back in the future."
The company added that the forecast profit for the 2002 account had increased to a mid-point of 25%. The gross incurred loss ratio at the end of June was 19.5%, which was the best Syndicate 33 has had since 1946.
In 2003, trading conditions for the whole group remained strong and market expectations for Hiscox's half-year results would still be achieved, despite the strengthening of WTC reserves, the company said.
"The Syndicate has some exceptional figures in the pipeline, both the UK Retail and International businesses are making great strides in profitability and we now have stronger reserves. The future looks good," the company concluded.
