Aon Benfieldthoughtleadership.aonbenfield.com/...update_hy2013.pdfAon Benfield 3 Executive Summary Lloyd’s reported a 10% decline in pre-tax profit to GBP1.38 billion for the first

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Aon Benfield

3

Executive Summary Lloyd’s reported a 10% decline in pre-tax profit to GBP1.38 billion for the first half of 2013,

driven by a reduction in the total investment yield from 1.2% to only 0.5%. A strong underwriting result nevertheless resulted in an annualized return on capital of 14%.

The market continues to grow. Gross premiums written rose by 5% to GBP15.5 billion, driven by risk-adjusted rate increases (1%), positive foreign exchange movements (2%) and organic growth (2%). Net premiums earned rose by 8% to GBP9.6 billion.

The accident year combined ratio fell by 1.0 percentage point (pp) to 95.0%, aided by a level of major losses that was almost half the long term average.

Prior year reserve releases increased to GBP779 million, or 8.1% of net premiums earned. The marine segment was impacted by a substantial increase in the estimated Costa Concordia loss, but all other classes saw better than expected claims development.

Technical profit of GBP1.3 billion and a calendar year combined ratio of 86.9% represented one of Lloyd’s best ever first half underwriting performances.

The total investment return fell by 60% to GBP247 million, driven by the low interest rate environment and the negative impact of rising yields on bond valuations in May and June.

Net resources (capital, reserves, subordinated loan notes and securities) hit a new high of GBP20.9 billion at June 30, 2013, despite a debt repurchase of GBP180 million in May.

The continued attractiveness of the Lloyd’s platform has been demonstrated by high levels of M&A activity in 2013 and the approval in principal of three new syndicates for 2014, with combined additional capacity of approximately GBP220 million.

Nephila Syndicate 2357 began underwriting non-traditional catastrophe excess of loss business on a collateralized basis in August 2013, underlining Lloyd’s willingness to engage with new sources of capital.

A.M. Best and Fitch recently joined Standard & Poor’s in revising the outlook on their Lloyd’s financial strength ratings from stable to positive.

Lloyd’s Update –October 2013

4

2013 Interim Results Lloyd’s reported a 10% decline in pre-tax profit to GBP1.38 billion for the first half of

2013, driven by a reduction in the total investment yield from 1.2% to only 0.5%.

Increased prior year reserve releases and below average major losses contributed to a

strong underwriting result. The annualized return on capital stood at 14%.

Exhibit 1: Lloyd’s Pro Forma Results

Income Statement

GBP (millions)

Full Year

2010

Full Year

2011

Full Year

2012

Interim

2012

Interim

2013

Year-on-Year

Change

Gross premiums written 22,592 23,477 25,500 14,768 15,496 5%

Net premiums written 17,656 18,472 19,435 10,466 11,107 6%

Net premiums earned 17,111 18,100 18,685 8,902 9,592 8%

Underwriting result 1,143 -1,237 1,661 1,004 1,261 26%

Investment result 1,258 955 1,311 619 247 -60%

Pre-tax result 2,195 -516 2,771 1,530 1,379 -10%

Key Ratios

Full Year

2010

Full Year

2011

Full Year

2012

Interim

2012

Interim

2013

Year-on-Year

Change

Combined ratio 93.3% 106.8% 91.1% 88.7% 86.9% -1.8pp

Investment yield 2.6% 1.9% 2.6% 1.2% 0.5% -0.7pp

Return on capital* 12.1% -2.8% 14.8% 16.4% 14.0% -2.4pp

*Capital, reserves, subordinated loan notes and securities

Source: Lloyd’s, Aon Benfield Market Analysis

Premium Income Additional capital flows from non-traditional sources created additional pricing pressure during the first half of 2013. Given that interest rates remain close to historic lows, an emphasis on underwriting discipline continues to be Lloyd’s top priority.

Gross premiums written totaled GBP15.5 billion, up 4.9% on a reported basis and 3.3% at constant exchange rates. In the aggregate, risk-adjusted rates rose by 1%, mainly driven by property direct and facultative (D&F) business. Underlying growth of 2% was said to be in line with business plans.

Exhibit 2: Gross Premiums Written


0

10

20

30

2008 2009 2010 2011 2012 2013

GBP

(bill

ions

)

Full Year

Interim

Aon Benfield

5

Underwriting Performance Lloyd’s recorded one of its strongest ever first half underwriting performances in 2013. Technical profit of GBP1.3 billion (1H 2012: GBP1.0 billion) equated to a combined ratio of 86.9%. The results were driven by increased prior year reserve releases and below average major claims activity.

Exhibit 3: Lloyd’s First Half Combined Ratio


The components of the combined ratio are shown in Exhibit 4, which demonstrates the significant influence of prior year reserve releases.

Exhibit 4: Composition of Lloyd’s Combined Ratio

*Excluding major losses


On an accident year basis, the underlying combined ratio was stable in the first half of 2013, a slight uptick in the loss ratio being offset by an improved expense ratio. The latter was mainly derived from positive foreign exchange movements.

Major losses totaled GBP230 million and were well below the long-term average of GBP406 million. Estimated losses from the Central European floods in the second quarter accounted for one third of the total, at GBP70 million.

For the ninth successive year, Lloyd’s has been able to report overall prior year reserve releases. These stood at GBP779 million in the first half of 2013, up from GBP648 million in the first half of 2012, stemming from most years, most syndicates and most classes. The marine segment was impacted by a substantial increase in the estimated Costa Concordia loss, but all other classes saw better than expected claims development.

91.6%98.7%

113.3%

88.7% 86.9%

-10%

10%

30%

50%

70%

90%

110%

130%

1H 2009 1H 2010 1H 2011 1H 2012 1H 2013

Attritional Loss Ratio Expense Ratio Major Losses Prior Year Reserve Development

AttritionalLossRatio

56.3%

92.6%86.9%

Expense Ratio

36.3%

2.4% -8.1%

Accidentyear*

Majorlosses

Reservereleases

Calendaryear

1H 2013AttritionalLossRatio

55.4%

92.6%88.7%

Expense Ratio

37.2%

3.4% -7.3%

0%

20%

40%

60%

80%

100%

Accidentyear*

Majorlosses

Reservereleases

Calendaryear

1H 2012


6

Investment Return Lloyd’s investments produced a total return of just GBP247 million or 0.5% in the first half of 2013, down from GBP619 million or 1.2% in the first half of 2012. This result was driven by the low interest rate environment and the negative impact of rising yields on bond valuations in May and June.

The three components of the result are shown in Exhibit 5 – the return on centrally-held mutual assets was 0.7%; the notional return on the capital supporting members’ underwriting, or Funds at Lloyd’s (FAL) was 1.0%; and the return on syndicate-level assets was just 0.2%. The FAL portfolio achieved a slightly higher return owing to a 10% allocation to equities.

Exhibit 5: Investment Return


Pre-Tax Results Lloyd’s reported a 10% decline in pre-tax profit to GBP1,379 million for the first half of 2013. Prior year reserve releases have contributed strongly to overall results in the last two years, as can clearly be seen in Exhibit 6. These represented 62% of underwriting profit and 56% of the total pre-tax result in the first half of 2013.

Exhibit 6: Pre-Tax Result Composition


0%

1%

2%

3%

4%

0.0

0.5

1.0

1.5

2.0

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 1H 2012 1H 2013

GBP

(bi

llion

s)

Investment return on Society assets (GBP)

Notional return on Funds at Lloyd's (GBP)

Syndicate investment return (GBP)

Investment return (%)

-3

-2

-1

0

1

2

3

4

5

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 1H 2012 1H 2013

GBP

(bi

llion

s)

Investment result

Prior year reserve releases

Accident year underwriting result

Other

Pre-tax result

Aon Benfield

7

The annualized return on capital was 14.0% in the first half of 2013, compared with 16.4% in the prior year.

Exhibit 7: Pre-Tax Results Exhibit 8: Return on Capital (Annualized)


-1

0

1

2

3

4

5

2009 2010 2011 2012 2013

GBP

(bill

ions

)

Interim Full year

-10%

0%

10%

20%

30%

2009 2010 2011 2012 2013

Interim Full year


8

Balance Sheet as at June 30, 2013 While some managing agents are gradually beginning to increase their investment

risk appetite, Lloyd’s overall investment allocation remains relatively conservative.

Capital resources are at an all-time high, even after a GBP180 million subordinated

debt repurchase in May.

Exhibit 9: Balance Sheet at June 30, 2013

Balance Sheet

GBP (millions)

Full Year

2009

Full Year

2010

Full Year

2011

Full Year

2012

Interim

2013

Year-to-Date

Change

Cash and investments 46,254 48,483 51,415 51,767 52,693 2%

Gross technical provisions 43,544 46,428 51,918 51,517 56,018 9%

Reinsurers’ share 9,931 10,237 12,153 12,439 14,272 15%

Net technical provisions 33,613 36,191 39,765 39,078 41,746 7%

Net resources* 19,121 19,121 19,114 20,193 20,873 3%

*Capital, reserves, subordinated loan notes and securities


Investments Cash and investments totaled GBP52.7 billion at June 30, 2013, up 1.8% from the end of 2012. Cash and letters of credit (LOCs) replaced government bonds as the second largest component. The credit rating profile of the increased GBP19.5 billion corporate bond portfolio, was ‘AAA’ 28%, ‘AA’ 26%, ‘A’ 33% and lower/unrated 13%.

Increased risk appetite was more evident within the central fund asset portfolio, which accounts for 4.5% of Lloyd’s total cash and investments. The allocation to corporate bonds was increased from 36% to 46% and global equities from 5% to 9%, while government bonds fell to 27%, from 42% at the end of 2012. A portion of the government bond portfolio was liquidated in order to fund Lloyd’s GBP180 million subordinated debt repurchase in May 2013. Lloyd’s plan to allocate a further 10% of the central fund portfolio to alternative asset classes over the course of 2013 was already partly achieved at the interim stage.

Exhibit 10: Investment Allocation at June 30, 2013

*Includes supra nationals and government agencies


37%

29%

27%

5% 2%

Total Invested Assets: GBP52.7 billion

Corporate bonds

Cash and LOCs

Government bonds*

Equities

Alternative investments

46%

27%

9%

5%

4%3%2%2%2%

Central Assets: GBP2.4 billion

Fixed income - corporateFixed income - government*Global equityEmerging markets & high yield bondsHedge fundsProperty equityCashEmerging equityCommodities

Aon Benfield

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Technical Reserves Gross provisions for outstanding claims increased by 2% or GBP0.9 billion to GBP41.1 billion over the six months to June 30, 2013. Reinsurers’ share increased by 1% or GBP0.1 billion to GBP10.8 billion. The ratio of claims reserves to overall net resources stood at 197% on a gross basis and 145% net of reinsurance.

Exhibit 11: Claims Reserve Leverage


Capital Lloyd’s is a partially mutualized market and does not hold conventional equity. The components of the capital base are shown in Exhibit 12. Both Funds at Lloyd’s and members’ balances operate on a several liability basis.

Overall net resources (capital, reserves and subordinated loan notes) rose by 3% to a record level of GBP20.9 billion at June 30, 2013. This was despite a GBP180 million repurchase of subordinated debt, which had been due to mature in 2014 and 2015. Assets admissible for solvency purposes were estimated to exceed solvency deficits by over GBP3 billion.

Exhibit 12: Lloyd’s Capital Base


Funds at Lloyd’s represents capital lodged and held in trust to support members’ underwriting commitments. The total rose by 3% or GBP0.4 billion to GBP16.1 billion at June 30, 2013, of which 52% was held in the form of LOCs and bank guarantees. Under the latest Solvency II proposals, Tier 1 capital must comprise 50% of regulatory capital. LOCs are currently eligible as Tier 2 capital only.

Members’ balances represent the net profit/(loss) to be distributed/(collected) by syndicates to/(from) capital providers. The total increased by GBP0.4 billion to GBP2.4 billion over the six months to June 30, 2013.

Central assets fell by 5% to GBP2.4 billion, including GBP0.7 billion of subordinated loan notes and perpetual capital securities. Mutual assets stood at GBP1.6 billion, including the Central Fund at just under GBP1.5 billion.

252%

178%

190%

216%

199%

197%

1519 19 19 20 21

38

3436

41 40 41

0

10

20

30

40

50

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 1H 2013

GBP

(bill

ions

)

Reinsurers' share of claims provision

Net claims provision

Net resources

15.3

19.1 19.1 19.1 20.2 20.9

0

5

10

15

20

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 1H 2013

GBP

(bi

llion

s)

Subordinated liabilities

Central assets

Members' balances

Funds at Lloyd's

Solvency surplus


10

The Chain of Security The resources available to pay claims at Lloyd’s are linked together in a ‘Chain of Security’ as follows:

1. Syndicate assets: Premium Trust Funds (PTFs) of GBP44.2 billion. All premiums received by syndicates are held in trust as the first resource for paying policyholders’ claims. Until all liabilities have been provided for, no profits can be released. Every year, each syndicate’s reserves for future liabilities are independently audited and receive an actuarial review.

2. Members’ assets: Funds at Lloyd’s (FAL) of GBP16.1 billion. Each member, whether corporate or individual,

must provide sufficient capital to support their underwriting at Lloyd’s. The capital is held in trust for the benefit of policyholders, but is not available to support the liabilities of other members. Assets supporting FAL requirements must be liquid but may include letters of credit and bank guarantees.

3. Central resources: Society of Lloyd’s net assets of GBP1.6 billion, plus subordinated debt of GBP0.7 billion. Should the first link need additional funds, the second link ensures members have resources available. In the rare event that these two links are insufficient, central resources can be made available at the discretion of the Council of Lloyd’s to ensure valid claims are paid.

Exhibit 13: Lloyd’s Chain of Security at June 30, 2013


Capital Setting at Lloyd’s From January 2013, managing agents are required to use Solvency II internal models to determine each syndicate’s Individual Capital Assessment (ICA). This is the level of capital required to cover underlying business risks at a 99.5% confidence level. Lloyd’s reviews all ICAs to assess the adequacy of the proposed capital level. When agreed, each ICA is then ‘uplifted’ to ensure there is sufficient capital to support the market’s ratings and financial strength. This uplifted ICA is known as the syndicate’s Economic Capital Assessment (ECA) and drives members’ capital levels.

Central assets are currently managed to a minimum of 250% of the ICA prepared centrally for the market as a whole. The Corporation regularly runs detailed analyses aiming to balance the need for financial security with the need for cost-effective mutuality of capital. Members’ contributions to the Central Fund remain at 0.5% of gross premiums written for 2013.

Funds at Lloyd's (underlying capital set by Lloyd's)GBP16,081 million

Premium Trust FundsGBP44,176 million

Subordinated Debt GBP725 million

Central Fund GBP1,487 millionCorporation Assets GBP150 million

Callable Layer (=3%)GBP761 million

Central Assets

Members'Assets

Several assets Mutual assets Contingent

Syndicate Assets

Aon Benfield

11

Recent Developments Capacity The 2013 year of account opened with a record level of capacity, estimated at just over GBP25 billion. Three new syndicates were launched at the beginning of the year and Nephila-backed Syndicate 2357 was approved to begin underwriting at the beginning of August, underlining Lloyd’s commitment to engage with new sources of capital. While early indications of 2014 syndicate capacity are few and far between, planned increases to at least GBP1 billion at Brit Syndicate 2987 and Hiscox Syndicate 33, coupled with ‘in principle’ approval of three new syndicates suggests that overall market capacity is set to further increase.

Exhibit 14: New entrants in 2013/2014

Syndicate

Number

Managing

Agent

Active

Underwriter Comments

1991 R&Q Daniel Wright Commenced underwriting delegated authority business from January 1, 2013, with mixed

capital backing and GBP77 million of stamp capacity.

6113 Barbican James Winn Special Purpose Syndicate taking a qualifying quota share of Barbican Syndicate 1955’s property

account from January 1, 2013, with estimated capacity of GBP24 million.

6115 Canopius Stephen

Gargrave,

Mike Duffy

Special Purpose Syndicate capitalized by Tower Group to provide whole account and additional

class quota shares of Canopius Syndicate 4444. Commenced underwriting on January 1, 2013,

with capacity of GBP70 million.

2357 Asta Frank Majors Backed 100% by Nephila Capital, commenced underwriting non-conventional catastrophe

excess of loss business on August 2, 2013, with initial start-up capacity of GBP10mn. Capacity is

expected to increase to GBP75 million for 2014.

1686* Asta Alistair Robson Axis Syndicate due to start trading January 1, 2014 with USD180 million of stamp capacity.

Business will consist of full or partial transfer of selected classes of business from Axis company

platforms in London, Bermuda and Dublin.

1729* Asta Duncan Dale Due to start trading January 1, 2014 with estimated capacity of GBP75 million. Capital backing

provided by US specialty casualty insurer ProAssurance Corporation (51%) and third parties,

including private Names.

2014* Pembroke David Bruce Formerly Special Purpose Syndicate 6110, Acappella will launch as a standalone syndicate from

January 1, 2014, with private Names backing and estimated capacity of GBP65 million.

*Subject to Lloyd’s / regulatory approval

Source: Company announcements, Lloyd’s, Aon Benfield Market Analysis

Following Markel’s acquisition of Alterra in May 2013, it is expected that selected classes of Alterra Syndicate 1400 business will transfer to Markel Syndicate 3000 from January 1, 2014. This is one in a long line of syndicate mergers/consolidations, designed principally to enhance market visibility and improve operating efficiencies.

Mergers & Acquisitions An uptick in M&A activity has been evident in the Lloyd’s market during 2013, with two deals completed and five more in process. Most recently ANV Holdings BV, which entered the Lloyd’s market in 2012 through its purchase of Flagstone’s Lloyd’s operations, has announced an agreement to merge its managing agent and operations with Jubilee. Under the proposed terms of the agreement, the still-relatively-new owners of Jubilee, Ryan Specialty Group, will own 20% of the combined operation, while ANV will own the majority stake of 80%.


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Exhibit 15: Corporate Activity in 2013

Date Acquirer Target Comments

Apr 2013 Aquiline Equity Manager of Syndicate 0218

May 2013 Markel Alterra Markel Syndicate 3000 and Alterra Syndicate 1400 expected to combine from the

2014 year of account

4Q 2013* Enstar/Stonepoint Arden / Atrium Manager of Syndicate 0609

4Q 2013* Enstar/Stonepoint Torus Manager of Syndicate 1301

4Q 2013* AmTrust Sagicor Europe Manager of Syndicate 1206 and Life Syndicate 0044

4Q 2013* Lancashire Cathedral Manager of Syndicates 2010 and 3010

4Q 2013* ANV Holdings BV Jubilee Group

Holdings Ltd

ANV Syndicate Management Ltd (manager of Syndicate 1861) to merge with Jubilee

Managing Agency Ltd (manager of Syndicates 0779 and 5820) from January 1, 2014

*Subject to Lloyd’s / regulatory approval (estimated completion date)

Source: Company announcements, Lloyd’s, Aon Benfield Market Analysis

Licensing As part of its Vision 2025 strategic plan, global expansion and growth in developing regions remains a key focus for Lloyd’s. Progress has been made in 2013 towards obtaining an onshore license in Turkey, which is seen as an important market and one of the world’s fastest growing economies. Lloyd’s is also in the process of setting up a reinsurance-focused branch office in Beijing, to further expand its established presence in China.

Latin America poses further growth opportunities for Lloyd’s, with its established license network in the region, and discussions with Colombian regulators underway. In May 2013, a new construction consortium was formed by Beazley, Canopius, Hardy and Talbot to capitalize on infrastructure growth in rapidly developing markets such as Brazil. The consortium can commit an aggregate maximum line size of USD166 million.

Regulation In June 2013, Lloyd’s signed a co-operation agreement with the UK Financial Conduct Authority (FCA, which replaces the former Financial Services Authority), whereby the FCA has officially recognized the efficiencies and internal regulation of Lloyd’s over its syndicates and managing agents, thus avoiding duplication of processes. The FCA will regulate and oversee Lloyd’s as a whole market, as the FSA did previously, rather than regulating all individual members.

Financial Strength Ratings Lloyd’s solid financial performance in recent years has been rewarded with positive rating outlooks from A.M. Best, Fitch and S&P. Entry to the ‘AA’ rating band for the first time would likely have a significant impact on the way the market is viewed and might potentially open up new revenue streams.

Exhibit 16: Lloyd’s Market Ratings

Rating Outlook Action

A.M. Best A+ (Excellent) Positive Positive outlook assigned July 19, 2013

Fitch Ratings A+ (Strong) Positive Positive outlook assigned June 25, 2013

Standard & Poor's A+ (Strong) Positive Affirmed May 23, 2013

Source: Rating agencies

Standard & Poor’s (S&P) upgraded Lloyd’s enterprise risk management (ERM) score to ‘strong’ from ‘adequate with strong risk controls’ in August 2012, and this was affirmed along with the financial strength rating in May 2013 under S&P’s new insurance criteria.

Aon Benfield

13

Appendix 1 – Active Syndicate Listing

Syn.

No.

Managing

Agent Agency Owner*

Largest Capital

Provider in 2013*

2012 Gross

Premiums Written

GBPmn

2012

Combined

Ratio

2012 Pre-

Tax Result as

% of NPE

2013

Capacity

GBPmn** 0033 Hiscox Hiscox Hiscox (72.5%) 825 75.7% 31.2% 950

0044 Sagicor Amtrust† Sagicor 7 106.9% -6.9% 7

0218 Equity Aquiline Aquiline (65.6%) 449 108.1% -4.9% 438

0260 Canopius Canopius Canopius (92.1%) 47 111.9% -7.1% 70

0308 Kiln Tokio Marine Tokio Marine (50.4%) 30 98.3% 1.9% 26

0318 Beaufort Munich Re Munich Re (91.2%) 163 77.2% 24.3% 235

0382 Hardy CNA CNA 290 110.6% -9.5% 330

0386 QBE QBE QBE (69.6%) 444 82.7% 26.9% 413

0435 Faraday Berkshire Berkshire 277 62.1% 43.6% 325

0457 Munich Re Munich Re Munich Re 494 82.4% 20.2% 425

0510 Kiln Tokio Marine Tokio Marine (55.3%) 1,153 93.8% 7.8% 1,064

0557 Kiln Tokio Marine Hampden (48.0%) 34 75.6% 26.8% 46

0566 QBE Operates as a trading division of Syndicate 2999

0609 Atrium Enstar/Stonepoint† Hampden (36.2%) 353 79.3% 23.7% 420

0623 Beazley Beazley Hampden (53.6%) 226 87.8% 13.8% 225

0626 Hiscox Operates as a trading division of Syndicate 0033

0727 Meacock Family-owned Hampden (45.8%) 93 90.5% 17.2% 81

0779 Jubilee ANV† Hampden (50.7%) 26 108.2% -2.5% 22

0780 Advent Fairfax Fairfax 158 98.9% 16.8% 200

0887 Amlin Operates as a trading division of Syndicate 2001

0958 Canopius Canopius Canopius (61.1%) 231 124.8% -23.1% 220


1084 Chaucer Hanover Ins Hanover Ins (97.7%) 906 90.4% 15.6% 770

1110 Argenta Argenta ProSight Specialty 67 123.9% -23.1% 110

1176 Chaucer Hanover Ins Hanover Ins (56.4%) 28 72.3% 29.7% 32

1183 Talbot Validus Validus 681 91.0% 11.8% 620

1200 Argo Argo Argo (78.3%) 376 88.2% 73.9% 350

1206 Sagicor AmTrust† Sagicor 194 109.4% -7.3% 200

1209 XL XL XL 321 95.9% 11.2% 300

1218 Newline Fairfax Fairfax 116 108.4% 26.1% 105

1221 Navigators Navigators Navigators 231 81.1% 27.9% 195

1225 Aegis Aegis Aegis (93.0%) 371 89.9% 18.2% 310

1274 Antares Antares Antares (74.7%) 197 91.3% 10.6% 222

1301 Torus Enstar/Stonepoint† Torus (82.5%) 82 116.6% -15.7% 160

1400 Alterra Markel Markel 198 103.4% 1.3% 235

1414 Ascot AIG (20%) AIG (98.5%) 654 81.0% 22.1% 650

1458 RenRe RenRe RenRe 98 109.0% -8.8% 138

1686† Asta Tawa/Paraline/Skuld Axis Capital Due to commence trading January 1, 2014

1729† Asta Tawa/Paraline/Skuld ProAssurance (51%) Due to commence trading January 1, 2014

1861 ANV ANV ANV 142 105.7% -4.0% 150

1880 Kiln Tokio Marine Tokio Marine 240 66.0% 38.0% 360

1882 Chubb Chubb Chubb 79 144.8% -44.1% 82


1897 R&Q R&Q Skuld (58.3%) 51 130.7% -30.7% 70

1910 Asta Tawa/Paraline/Skuld Global Atlantic 262 71.2% 35.6% 255

1919 Starr Starr International Starr International 255 94.1% 8.9% 220

1945 Asta Tawa/Paraline/Skuld White Mountains 44 117.0% -16.9% 93

1955 Barbican Barbican Barbican 220 95.8% 5.9% 186

1967 W.R. Berkley W.R. Berkley W.R. Berkley 116 102.5% -2.0% 150

*100% unless otherwise stated **Unofficial and subject to change †Subject to Lloyd’s/regulatory approval 1/2


14

Syn.

No.

Managing

Agent Agency Owner*

Largest Capital Provider

in 2013*

2012 Gross

Premiums Written

GBPmn

2012

Combined

Ratio

2012 Pre-

Tax Result as

% of NPE

2013

Capacity

GBPmn** 1969 ANV ANV Argenta (80.1%) 104 90.6% 10.0% 110

1991 R&Q R&Q R&Q (22.7%) - - - 77

2001 Amlin Amlin Amlin 1,470 94.7% 9.4% 1,400

2003 Catlin Catlin Catlin 1,791 93.5% 12.5% 1,500

2007 Novae Novae Novae (90.0%) 612 93.1% 10.6% 575

2010 Cathedral Lancashire† Cathedral (57.8%) 285 77.8% 23.9% 350

2012 Arch Arch Arch 169 110.1% -6.0% 200

2014† Pembroke Ironshore Hampden SPS 6110 re-launching as standalone syndicate 2014 from January 1, 2014

2015 Asta Tawa/Paraline/Skuld SCOR 82 96.4% 3.9% 120

2088 Catlin Catlin China Re 48 121.8% -20.1% 50

2121 Argenta Argenta Argenta (91.6%) 255 97.7% 4.0% 200

2232 Capita Capita Allied World 69 104.0% -2.6% 76

2357 Asta Tawa/Paraline/Skuld Nephila Capital - -- -- 100

2468 Marketform American Financial American Financial (70.0%) 179 133.0% -25.1% 145

2488 ACE ACE ACE 352 103.2% 17.2% 350

2525 Asta Tawa/Paraline/Skuld Hampden (45.2%) 35 64.9% 40.8% 42

2526 Asta Tawa/Paraline/Skuld Alpha (23.7%) 43 98.9% 3.8% 59

2623 Beazley Beazley Beazley 1,019 87.8% 17.0% 1,025

2791 MAP MAP (90.0%) Hampden (37.6%) 307 68.1% 40.6% 511

2987 Brit Brit Brit 1,089 98.4% 6.6% 940

2999 QBE QBE QBE 1,155 89.3% 14.6% 1,060

3000 Markel Markel Markel 386 92.8% 18.3% 340

3002 Catlin Catlin Catlin 10 86.7% 13.4% 13

3010 Cathedral Lancashire† Cathedral 29 95.1% 5.3% 30

3210 Mitsui MS&AD MS&AD 302 98.0% 8.2% 340

3334 Sportscover Sportscover Wild Goose 87 114.3% -13.6% 43

3622 Beazley Beazley Beazley 13 97.8% 2.4% 15

3623 Beazley Beazley Beazley 110 111.0% -9.8% 125

3624 Hiscox Hiscox Hiscox 245 108.2% -7.1% 250

3902 Ark Operates as a trading division of Syndicate 4020

4000 Pembroke Ironshore Ironshore 226 94.2% 7.5% 250

4020 Ark Group Ark Group Ark 341 96.3% 10.7% 381

4141 HCC HCC HCC 91 89.3% 16.6% 131

4242 Asta Tawa/Paraline/Skuld Paraline (18.6%) 73 89.2% 10.9% 80

4444 Canopius Canopius Canopius (65.8%) 648 94.8% 10.8% 550

4472 Liberty Liberty Liberty 1,107 94.3% 19.4% 1,000

4711 Aspen Aspen Aspen 267 92.4% 8.3% 290

5000 Travelers Travelers Travelers 320 91.7% 11.3% 300

5151 Montpelier Montpelier Montpelier 155 88.6% 15.8% 180


5820 Jubilee ANV† Argenta (36.8%) 129 107.3% -5.4% 131

6103 MAP MAP (90.0%) Hampden (51.1%) 27 77.8% 24.0% 41

6104 Hiscox Hiscox Hampden (41.6%) 44 79.6% 22.5% 66

6105 Ark Group Ark Argenta (69.2%) 8 98.3% 14.5% 19

6106 Amlin Amlin Hampden (59.1%) 36 66.3% 34.2% 42

6107 Beazley Beazley Hampden (40.4%) 9 79.5% 17.7% 12

6111 Catlin Catlin Hampden (57.6%) 71 108.2% -7.1% 86

6112 Catlin Catlin Everest Re 32 111.2% -10.0% 29

6113 Barbican Barbican Argenta (58.6%) - - - 24

6115 Canopius Canopius Tower - - - 70

*100% unless otherwise stated **Unofficial and subject to change †Subject to Lloyd’s/regulatory approval

Hampden and Argenta are Lloyd's members' agents acting mainly on behalf of third party capital providers.

Source: Lloyd's, Aon Benfield Market Analysis

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Documents

Aon Benfieldthoughtleadership.aonbenfield.com/...update_hy2013.pdfAon Benfield 3 Executive Summary Lloyd’s reported a 10% decline in pre-tax profit to GBP1.38 billion for the first