Hiscox Syndicates Limited has released updated forecasts for the open years of Syndicate 33 and SPA 6104 as follows

Syndicate 33

Year of account

Capacity
£000s

Result/Revised forecast Range

Previous Forecast
Range

Change at
Midpoint

2020

1,698,078

-7.5% to 2.5%

-8.3% to 1.8%

0.8 points better

2021

1,699,385

-4.1% to 5.9%

-2.6% to +7.4%

1.5 points worse

SPA 6104

Year of account

Capacity
£000s

Result/Revised forecast Range

Previous Forecast
Range

Change at
Midpoint

2020

44,363

-13.4% to -3.4%

-12.4% to -2.4%

1 points worse

2021

23,272

-19.5% to -4.5%

-22.0% to -12.0%

5 points better

Forecasts are expressed as a percentage of allocated capacity and are after the deduction of all standard personal expenses but before members’ agents’ fees.

Argenta comment: On the face of it, these forecasts are disappointing. However, we would expect improvement in both syndicates for both years of account ahead of closure. Hiscox reserves cautiously, with syndicates holding reserves at a margin well in excess of actuarial best estimates. This means that actual results are better than interim forecasts. Since 2014, the actual result for syndicate 33 has been an average of 7.3 percentage points on syndicate capacity better than the forecast released after the fifth quarter. By the same measure, SPA 6104 has delivered a result almost 21 percentage points better at closure than the fifth quarter estimate.

Hiscox released its first quarter management statement on Friday 6th May which revealed that the group has set aside total reserves of $40m for losses arising out of the conflict in Ukraine. Although advised losses to date are minimal, the group is anticipating some loss activity arising out of its political violence, war and terror portfolio. We anticipate that most of Hiscox’s exposure emanates from its 70% share of syndicate 33 and that the lion’s share falls to the 2021 year of account.