Lloyd's of London

Fewer catastrophe events, combined with lower and less frequent casualty claims, helped Lloyd’s syndicates deliver another strong set of results in 2015, according to Standard & Poor’s.

The average combined operating ratio (COR) was 90%, but the ratings agency added that some syndicates have been hit by strong competition, excess capacity, and softening rates.

“We were not surprised to find that the under-performers included new syndicates, which are typically burdened by high start-up expenses when they enter the Lloyd’s market,” the S&P report said.

“On the other hand, top performers were mostly cautious and proactive in terms of cycle management, with good underwriting discipline.”

The study of 94 syndicates found that 31% saw their COR rise by more than 5 percentage points in 2015. Meanwhile all the biggest syndicates with an allocated capacity of more than $1bn reported CORs below 100%, with an average of 88%.

Syndicates reporting underwriting losses represented only about 12% of the Lloyd’s market’s overall 2015 allocated capacity of £26.1bn.

Syndicates reporting CORs above 100% rose to 23% from 18% in 2014. Of these 21 syndicates, nine reported a COR of over 115% in 2015, up from seven syndicates in 2014.