The current hard market has seen a drop in the number of Lloyd’s syndicates going into run-off
The current hard market has caused the number of Lloyd’s syndicates going into run-off to fall, according to Steve McCann, head of open years management at Lloyd’s, who was speaking at the Cavell Rendez-Vous in Norwich.
The combination of a hard market and closure activity last year has seen the gross liabilities of £7bn managed by open years in 2005 fall to just £4.7bn in 2006, with the £4.4bn net reinsurance liabilities falling to £3bn in 2006.
The number of syndicate years of account supervised by the Open Years Management team also fell from 102 in 2005 to just 90 in 2006, according to McCann.
“It is likely that we’ll see more run-offs occurring once the market reaches its softer cycle
“Due to the current hard market, companies and syndicates are unlikely to want or need to enter run-off,” McCann said. “However it is likely that we’ll see more run-offs occurring once the market reaches its softer cycle.”
McCann also pointed out the value of the Lloyd’s Central Fund, which as at 31 December, 2006 stood at £843m, excluding assets from subordinated debt.
The Central Fund hit the headlines last week with the announcement that a settlement had been reached between Lloyd’s and brokers Benfield and Aon. The settlement marked the end of 5 years of dispute arising from claims made to the Fund in the wake of the 9/11 attacks in the US.