Q1 cat losses hit Kiln's 2009 estimates
Lloyd’s managing agencies Kiln and Hiscox have cut their results estimates for the 2009 year of account for certain of their syndicates.
Kiln has reduced the 2009 results estimates for three of its four syndicates as a result of natural catastrophe losses in the first quarter of 2010.
The firm has cut the estimate for Syndicate 510 to between 9.4% and 14.4% of total capacity from its previous estimate of between 13.1% and 18.1%, for Syndicate 557 to between 11.2% and 16.2% from between 13.4% and 18.4% and for Syndicate 807 to between 3.3% and 8.3% from between 5.3% and 10.3%.
However, it boosted its 2009 result estimate for Syndicate 308 to between 0.7% and 5.7% of capacity from between -1.5% and 3.5%. Kiln said that while there was a slight improvement in its estimates for the 2008 year of account, the 2009 year has suffered because of the succession of natural catastrophes in Q1 2010. The largest of the losses to Kiln is the Chilean earthquake, which the firm estimates will cost it 42.5m, spread across syndicates 510, 557 and 807.
Syndicate 510 will pick up £30m of the loss, Syndicate 557 will pay £2.5m and Syndicate 807 will pay £10m, Kiln estimates.
Kiln added, however, says the explosion of the Deepwater Horizon oil rig and the resulting oil spill, which expects to cost it £6.5m, will have a minimal effect on forecasts. The firm expects to absorb the loss in its standard claims utilisation for the second quarter.
Meanwhile, fellow Lloyd’s player Hiscox has reduced its estimate for Syndicate 6104’s 2009 result to between 20% and 35% of capacity from between 35% and 50%. Its estimates for the 2009 and 2008 results of Syndicate 33 and the 2008 results of Syndicate 6104 remain unchanged.
Under the Lloyd’s three-year accounting system, accounting years remain open for 36 months. Managing agents provide syndicate forecast information on a quarterly basis for any year of account that has reached or passed the 15-month stage of development but has not yet closed.