Apollo Syndicates results and updated forecasts
We have received the final result for the 2016 account of Apollo Syndicate 1969 as well as updated forecasts for the 2017 year of account. Apollo has also provided early indications of the outcome for the 2018 year of account of Syndicate 1969 and SPA 6133. All years are projected to be in loss, with the position on the 2016 and 2017 accounts of 1969 and on the 2018 account of SPA 6133 of particular concern.
The 2016 account has deteriorated by more than 10 percentage points from midpoint of the forecast given at the end of September to a closing loss of 30.7% of capacity. The forecast at the end of September itself had deteriorated in the quarter, from a midpoint loss of 15%. Apollo reports that there has been deterioration on the 2015 and 2016 underwriting years account of the non-marine liability account and also in the specie account.
The 2017 account has also moved further into loss, with the revised forecast loss on capacity now set in a range between 25% and 30% of capacity (the forecast at 30 September was for a loss in the range of 14% to 24%, while the forecast as at 30 June was a loss in the range 12.5% to 22.5%). In the final quarter of 2018, the syndicate has sustained losses to the 2017 account from hurricane Michael and the underlying attritional loss ratios have worsened. Given the movements on the non-marine liability account in earlier years, the forecast ultimate loss ratios have been increased, while an additional non-specific management load has been added to the aggregate reserves. Apollo will be making a cash call of 11.7% of capacity on the 2017 account to coincide with distribution of the 2016 results.
Although there is no formal forecast for the 2018 at this stage, Apollo expects this account to be loss making. Forecast loss ratios for the non-marine liability account and elsewhere have been strengthened in line with the experience on 2015 and 2016. There are some reductions in forecast premium income in the light of remedial underwriting measures taken in the year and slower than expected take up of the IBoTT Rover product launched in the year. The syndicate has exposure to hurricane Michael. The projected loss for the 2018 account is put at $10m (£7.7m), equivalent to 3.4% of capacity.
On a GAAP basis, the result for the calendar year of Syndicate 1969 is a loss of £50m, with a combined ratio of 126%.
SPA 6133, which started underwriting for the 2018 year of account, is also expected to be loss making in its first year. The account has losses from typhoons Jebi and Trami, hurricanes Florence and Michael and from the wildfires in California, with an expected cost of $27m. Apollo is currently forecasting a loss of $26m (£20.8m) for the year, equivalent to 60% of capacity. The managing agent will be making a cash call of 45% of capacity, due for payment in June this year.
The result for the calendar year on a GAAP basis is a loss of £21.4m, with a combined operating ratio of 191%.
A list of the syndicate results and forecasts received to date is available here.