Brit one of the big growing Lloyd’s syndciates out of top ten in 2014
Gross written premium fell from £1,18bn in 2013 to £887.6m last year as it scaled back in aviation and bloodstock. Around 90% of QBE’s international business is written from London.
Ross Curran, analyst for Commonwealth Bank of Australia, told SNL Financial: “Lloyd’s has been fundamental to the group’s growth over the past nearly two decades.
|Top 10 Lloyd’s Syndicate GWP in 2014|
|Syndicate||Managing agent||Managing agent group||GWP 2014||GWP 2013 %||YOY Change %||Market Share %|
|2003||Catlin Underwriting Agencies Lmimited||Catlin Group Ltd||£1,989.1m||£1,917.4m||3.73||7.69|
|2001||Amlin Underwriting Ltd||Amlin PLC||£1,537.9m||£1,471.7m||4.50||5.95|
|2987||Brit Syndicates||Brit PLC||£1,303.1m||£1,182.8m||10.17||5.04|
|4472||Liberty Managing Agency Limited||Liberty Mutual Holdings Co||£1,234.4m||£1,268.1m||-2.66||4.78|
|510||Tokio Marine Kiln Syndicates Ltd||Tokio Marine Holdings Inc||£1,097.2m||£1,168.8m||-6.12||4.24|
|2623||Beazley Furlonge Ltd||Beazley PLC||£1,034.2m||£1,090.3m||-5.14||4.00|
|1084||Chaucer Syndicates Ltd||Hanover Insurance Group Inc||£898.8m||£887.9m||1.23||3.48|
|2999||QBE Underwriting Ltd||QBE Insurance Group Ltd||£887.6m||£1,118.1m||-20.62||3.43|
|33||Hiscox Syndicates Ltd||Hiscox Ltd||£832.4m||£823.1m||1.13||3.22|
|4444||Canopius Managing Agents Ltd||Sompo Japan Nipponkoa Hdings Ltd||£726.8m||£704.4m||3.18||2.81|
“The current CEO [John Neal] came from that market and knows it extremely well. I think Lloyd’s is too engrained in the group’s DNA for it to exit entirely.”
Curran added that the QBE’s restructuring was largely complete and he expected it to once again grow.
Analysis from SNL Financial shows that Catlin once again was the largest syndicate. Brit Syndicates Ltd was one of the big growers, with premiums jumping 10.17% to £1.3bn.
SNL analysis of Brit’s 2014 full-year presentation attributed this to robust organic growth in U.S. speciality business and the June 2014 takeover of the renewal rights to QBE’s Lloyd’s aviation business.
Shore Capital analyst Eamonn Flanagan said overall Lloyd’s was extremely attractive as a platform for acquiring businesses.
Being a Lloyd’s member allows a company to leverage the marketplace’s A+ Standard & Poor’s capital rating, even if the company itself holds a lower rating, he told SNL.
“That’s one of the biggest issues for all of the players trying to get in, like Fairfax and some of the Middle East and Asian companies,” said Flanagan. “That capital efficiency is a major draw of Lloyd’s.”
Outside of the Lloyd’s market — particularly in reinsurance — a trend of merging and upsizing is emerging, as companies aim to secure the lion’s share of available business. But within 1 Lime Street, size isn’t everything.
“And if you look at Hiscox Ltd for example, they are even walking away from business,” Flanagan said. In the case of Fairfax and Brit, discussions regarding the benefits of the merger have circled around strategy, not scale, he added.
“A focus on gaining scale is not something which will always go down well with shareholders in a tough environment,” he said.