SVB Holdings has announced that its SVB Syndicates unit will next week be submitting accounts below market expectations, with a predicted operating loss of £33m.
The Lloyd's managing agency saw its share price plummet 33% last week, valuing it at around £202m as a result of the profit warning. This had a knock-on effect, causing some of Lloyd's other eleven quoted vehicles, such as Hiscox, BRIT and Cox shares to drop.
In a statement to the stock exchange it said: “It now appears likely that the operating result before tax for the year to December 31, 2001, based on the long-term rate of investment return, will emerge at a loss of the order of £33m.”
Chief executive Rupert Villiers said: “This reflects business written in the past, where the extent of the rate has only become apparent at a later stage.”
Poor underwriting results have been seen in the property arm of the business, particularly in Syndicate 1212, which was affected by the tropical storm Allison.
The SVB statement said: “Radical corrective action has already been taken to refine and refocus property underwriting at SVB, which should provide the basis for an improved performance in this sphere in the future.”
Marine and aviation have been hit by losses resulting from the Petrobras oil rig explosion and the suicide attack at the Sri Lankan international airport, costing £2.5m and £1.5m respectively, and specialty businesses have also been affected by losses. Current projections imply that Syndicate 1212 will have aggregate losses on speciality and liability business in excess of £40m.
Active underwriter of Syndicate 1212, Stephen Burnhope, will be leaving the syndicate in the “immediate future” and will be replaced at the end of the year.SVB Holdings made a £4.5m loss in 2000, compared to a £23.8m profit in 1999.
