Bermuda-based insurance group PX Re quit Lloyd's this week, blaming the market's “excessive” expenses for the withdrawal.

The move immediately forced one of the group's syndicates into run-off and left two others seeking to create their own integrated Lloyd's vehicles (ILVs).

PX Re is the managing agent for retrocessional and accident and health syndicate 1224, Lloyd's only captive syndicate SmithKline Beecham 1250, and personal lines syndicates 2002 and 2004.

Syndicate 1224, which had a £35m capacity, has already gone into run-off, whereas 2002 (Admiral) and 2004 (Zenith) are seeking to develop their own ILVs. On a combined basis, the PX Re-managed syndicates had a capacity of around £170m.

Neither syndicate is capitalised by PX Re and so neither expects to be heavily affected by the withdrawal.

PX Re was unable to confirm whether management of the Smith-Kline captive, which has capacity of £80m, would now be switched to another managing agent or whether it would be moved out of Lloyd's entirely.

PX Re blamed its withdrawal from the market on the cost of operating at Lloyd's.

In a statement that formed part of the group's third quarter results, PX Re explained its exit from Lloyd's.

It said: “During the third-quarter, PX Re ceased accepting new or renewal risks at Lloyd's as the business being written lacked the quality and diversification which the company hoped to achieve.

“Also, expenses of maintaining this operation proved to be excessive.”

The criticism of Lloyd's expenses is believed to be a veiled attack on the market's imposition of capital loading requirements earlier this year.

PX Re was one of 12 managing agents told to increase capital loading for the syndicates that were felt to have under-performed.

But Mike Walton of syndicate 1224 dismissed claims that Lloyd's loadings had been a factor for his syndicate being placed into run-off.

He said: “Lloyd's capital loading requirement isn't a problem. It had no impact on 1224 which was over-funded anyway.”