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Tokio Marine Kiln’s syndicate losses continue at latest forecast

17th May 2018 - Author: Matt Sheehan

Tokio Marine Kiln (TMK) has released the results for its three non-aligned Lloyd’s of London Syndicates and updated its 2017 year of account forecasts, revealing that losses are expected to continue in response to the costly catastrophe events experienced in late 2017.

Tokio Marine Kiln logoTMK’s Syndicates 510 and 557 both showed slight improvements on the 2016 year of account following a benign quarter, but losses remained for 2017.

Syndicate 308 continues to make a loss on both 2016 and 2017 years of account, having been placed into run-off in response to challenging market competition.

Charles Franks, Chief Executive Officer (CEO) of Tokio Marine Kiln, said: “We’ve seen a relatively quiet quarter which has given more stability to the 2017 year of account forecasts with Syndicate 510 remaining flat and an improvement in the position of Syndicate 557. We have also made significant progress with paying claims arising after the hurricanes Harvey, Irma and Maria.

“Whilst the rating environment is positive in certain classes, the market remains highly competitive across much of our account.  We continue to pursue good opportunities that are in line with our strategic business areas and priorities.

“We also report here on the forecasts relating to the cessation of our Life syndicate 308. The figures reflect the position as we run off the business and allow for increased expenses and other costs involved in its closure.”

For the 2016 year of account, Syndicate 510’s capacity was £1,062 million, with an updated result range of -3.0% –  2.0%, a slight improvement from the previous forecast range of -3.8% – 1.2% at February 2018.

Similarly, Syndicate 557’s capacity was £35 million with a result range of 12.0% – 17.0%, compared with a previous range of 10.6% – 15.6%.

Syndicate 308 had a capacity of £32 million and its result range was updated to -16% to -11% from -14.6% to -9.6%.

TMK explained that Syndicate 557 had minimal exposure to catastrophes and remains on course to make a good profit, while Syndicate 510 saw a small improvement and Syndicate 308 suffered an increase in incurred claims on a key binder.

For the 2017 year of account, Syndicate 510 has a capacity of £1,131 million with a result range of -12.3% to -7.3%, unchanged from TMK’s February 2018 forecast range. Syndicate 557 has a capacity of £34 million and an updated range of -36.3% – 31.3%, compared with February’s -41.3% – 36.3%. Finally, Syndicate 308 has a capacity of £31 million, and a slight adjustment to the result range at -54.8% to -49.8% from -54.9% to -49.9%.

Syndicates 510 and 557 are both still forecast heavy losses due to 2017’s high catastrophe costs, although 557 saw its range improve modestly thanks to a relatively stable first quarter.

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