Limit syndicate warns of growing competition
Increasing competition in the liability markets will continue to put rates under pressure, a leading liability figure has warned.
David Constable, active underwriter for Syndicate 386, which is part of QBE's Lloyd's business Limit, said that competition in employers' liability, public liability and product liability had increased during 2004.
He added that while the increase in competition was particularly noticeable in contractors' risks, Syndicate 386 was not yet feeling a substantial effect from new competitors such as Quinn-direct.
But Constable said that while the liability rating environment was still good, it did not compare to the "exceptional" rates of 2003.
He confirmed that capacity for Syndicate 386 would reduce to £425m in 2005 from £500m this year, in line with market conditions.
QBE provides 55% of the capacity for Syndicate 386, with the rest coming from Names and corporates.
For the six months to
30 June 2004, QBE reported a net profit after tax of A$320m (£126m), up 33% on the first half of 2003.
Gross written premiums (GWP) for the first half of the year fell slightly to A$4.7bn.
Limit, comprising six Lloyd's syndicates, reported GWP of A$1.5bn, and a combined operating ratio of 90.1%.
But despite the rating environment, QBE has upgraded its insurance profit expectations for the remainder of 2004 and 2005 from the range of 10%-11%, up to 12%-13%, net of earned premium.