Syndicate Research Limited (SRL) has announced that it has assigned its Continuity Opinions (SCOs) to a group of major Lloyd’s syndicates.
Following these actions, SRL reports that SCOs have now been assigned to 77% of Lloyd’s market capacity, with scorecard indicators to 92% of market capacity; research is issued on all trading syndicates.
SRL stated that the main SCO factors incorporated into its internal scorecard are (i) cross-cycle indicative average annual returns on capital (ROAC) and (ii) group support.
The latest Opinions show a mixed performance across the market’s heavyweights, with several receiving an ‘Average (B) opinion.
Syndicate 1458 (RenaissanceRe), 1955 (ARCH), and 2012 (Arch) were all assigned a B (Average) Continuity Opinion with a stable outlook.
Specifically, Arch’s syndicate 2012 received the opinion despite reserve deterioration for 2024, while syndicate 1955 was noted for a materially changed book in 2019 and 2022.
Axis syndicate 1686 and Hamilton syndicate 4000 were also assigned a B^ (Average) Continuity Opinion, with Hamilton’s assessment noting uncertainty due to a changed, merged account.
W.R Berkley’s syndicate 1967 also received a B^ (Average) opinion, with SRL noting its ROAC was in line with the ‘Average’ benchmark when excluding 2020/2021 COVID losses.
Two syndicate received an ‘Above Average’ (B+) opinion, with one facing a negative outlook. Lancashire syndicate 3010 was assigned a B+^ (Above Average) Continuity Opinion due to its ROAC aligning with the ‘Above Average’ benchmarks, but SRL immediately set the outlook to negative.
According to SRL, this is based on uncertainty over the Russia/Ukraine conflict losses and the potential for Lancashire to merge the syndicate with its lower-ranked syndicate 2010 within the next two years.
Tokio Marine HCC syndicate 4141 also received a B+^ (Above Average) opinion, positioned at the lower end of its peer group due to a material variability in its results.
White Mountains’ syndicate 3902 earned a B+^ (Above Average) opinion, positioned at the higher end of its peer group, while syndicate 4020 achieved the highest rating in the list with an A-^ (Good) Continuity Opinion, based on ROAC in line with the ‘Good’ benchmarks.
Both White Mountains syndicates carry a stable outlook. In contrast, Aspen syndicate 4711 was assigned a B-^ (Below Average) opinion, positioned in line with its peer group despite recent realigned business and profits from 2022 to 2024.
SRL’s Continuity Opinions are opinions on individual Lloyd’s syndicates’ relative, potential continuity prospects for policyholders. ^ indicates SCO based on public or limited non-public information.
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