Updated Atrium syndicate 609 Forecasts at Q3 2023

Atrium Underwriters Limited has provided us with updated forecasts for the open years of Syndicate 609 as follows:

The 2021 year of account has exposures to potential claims arising out of aircraft owned by western leasing companies but leased to airlines in Russia. This is a very complicated set of circumstances and the evidential picture is still developing. Factors including whether the loss is to aviation all risks policies or war loss policies, how a date of loss is established, the number of distinct events and the impact of sanctions result in different reserving outcomes for the syndicate. Atrium has modelled the implications of these scenarios using a probabilistic framework, with the aggregate reserve included in the overall forecast result. Nonetheless, the potential for variation to booked reserves is considerably greater than the normal level of sensitivity to downside risk and the actual outcome of the aircraft claims could be in a wide range with greater than usual variability.

Atrium also lists key assumptions on which the open year forecasts are based. These include

• Inherent volatility in claims development will not give rise to actual ultimate claims which are materially divergent from expectations. In particular there will be no significant distortion in the incidence of major catastrophe or attritional losses or in the ability of the syndicates’ reinsurers to respond to potential reinsurance recoveries;
• The development of open year premiums will be broadly consistent with historical development patterns;
• There will be no material change in reserving methodology or accounting policies at the respective dates of closure of the open years;
• Inflation, interest and exchange rates as at the respective dates of closure of the open years will not differ significantly from those taken into account in the forecasts;
• There will be no material unbudgeted expenses; and
• Investment returns will be materially in line with investment manager expectations.

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