Atrium to leave 2021 account of syndicate 609 open at the end of 2023

Atrium Underwriters Limited has provided us with an update on the forecasts for the open years of Syndicate 609 as follows.

2021 year of account

Capacity	Forecast range as at 30 September 2023	Forecast range as at 31 December 2023	Change at midpoint
£624,854,000	+5.0% to +15.0%	+5.0% to +15.0%	unchanged

The 2021 year of account has the largest potential exposures to possible claims arising out of aircraft owned by Western leasing companies and leased to Russian airlines following the Russian invasion of Ukraine in February 2022.

There are multiple ongoing litigations in several jurisdictions and the evidential picture is still developing. In particular the managing agent needs to consider the following factors: (i) whether the loss is an all risks or war peril event (ii) the date of loss (iii) whether this is a single loss or a series of events and (iv) the impact of sanctions on all of these factors.

Different assumptions result in different outcomes for the syndicate. The managing agent has modelled the financial implications of  various scenarios, and has taken into account the uncertainties listed above. A probabilistic framework has been used, and the reserving approach is consistent with the prior year end and previous quarters.

While the view of the managing agent remains unchanged, the probabilities assigned to the different scenarios have been reviewed. There is still considerable reliance placed on subjective, expert judgements.

Given the nature of the circumstances and the consequent wide range of possible outcomes, Atrium has decided that the 2021 year of account should not close after 36 months and it will remain open until the level of reserve sensitivity normalises.

The managing agent does not propose to release profits recognised to date at this stage.

2022 year of account

Capacity	Forecast range as at 30 September 2023	Forecast range as at 31 December 2023	Change at midpoint
£650,861,000	+7.5% to +17.5%	+7.5% to +17.5%	unchanged

The forecast for the 2022 year is unchanged, although underlying assumptions have been adjusted as this year will not benefit from any prior year development on earlier years of account, nor from investment income on the reinsurance to close.

 

As usual, syndicate forecasts are expressed as a percentage of syndicate allocated capacity and are after the deduction of all standard personal expenses but before members’ agents’ charges.

The final result for the 2021 year of Syndicate 609 at 31 December 2023 remains subject to sign off and auditor opinion.

Managing agents are in the process of finalising accounts as at 31 December 2023, including the final results for the closing 2021 year of account. We expect to be reporting these results over the coming weeks, before Lloyd’s releases the complete schedule of 2021 results and updated forecasts for 2022 on 29 February.

Dates for your diary

29th February	Lloyd’s to issue schedule of third party syndicates’ 2021 results and updates to 2022 forecasts
5th March	Hiscox Group preliminary results
6th March	Lancashire Group preliminary results
7th March	Beazley Group preliminary results
28th March	Lloyd’s annual results