QBE Underwriting Limited has provided us with updated forecasts for the 2020 and 2021 years of account of Syndicate 386 as at 30 June 2022. These are as follows:

Year of account

Capacity
£000s

Revised forecast Range

Previous Forecast
Range

Change at
Midpoint

2020

316,545

0.2% to 5.2%

8.1% to 13.1%

7.9 points worse

2021

332,887

11.1% to 16.1%

11.4% to 16.4%

0.3 points worse

QBE adds that the adverse movement on the 2020 account arises out of continuing unfavourable movements on the syndicate’s portfolio of fixed income bonds (as interest rates increase the value of a bond will fall) as well as deterioration on reserves for books of business in the UK and Australia. There is a small adverse movement on the 2021 year of account, again attributed to lower expected investment returns, offset by a better underwriting profit. The majority of the year of account’s exposure to investment risk occurs in the final year before closure, after receipt of the reinsurance to close premium from the predecessor year, so the final investment result will depend on conditions in the 2023 calendar year.

Syndicate forecasts are expressed as a percentage of allocated capacity and after all standard personal expenses but before members' agents' charges.