Forecasts & Results

Hiscox Syndicate 33 and SPA 6104: 2018 Results, Updated 2019 Forecasts and Initial 2020 Forecasts

Posted 03.03.2021 – Quick takes

Hiscox Ltd has released the following results for the 2018 year of account, updated forecasts for the 2019 year of account and initial forecasts for the 2020 year of account for Syndicate 33 and SPA 6104.

Syndicate 33
The 2018 result of +0.1% of capacity is an improvement on the -2.0% midpoint of the previous forecast range, which was set between -7.0% and +3.0% of capacity.
The 2019 forecast range has improved, from between -13.0% and -3.0% (midpoint -8.0%) to between -11.0% and -1.5% (midpoint -6.5%) of capacity.
The initial forecast for 2020 is within a range of between -7.0% and +3.0% (midpoint -2.0%) of capacity.

SPA 6104
The 2018 result of -48.8% of capacity is a marginal improvement on the -49.0% midpoint of the previous forecast range, which was set between -54.0% and -44.0% of capacity.

The 2019 forecast range has improved, from between -41.0% and -32.0% (midpoint -36.5%) to between -30.5% and -20.5% (midpoint -25.5%) of capacity.

The initial forecast for 2020 is within a range of between -28.5% and -18.5% (midpoint -23.5%) of capacity.

Alpha comment

We are pleased to see the 2018 year of syndicate 33 closing just the right side of breakeven, after a difficult year with low rates prevalent across most areas of the book and with significant Japanese losses hitting the reinsurance book. These also significantly impacted SPA 6104 which led to the large loss, greater than our other supported catastrophe syndicates. The improvement in forecasts of both syndicates for 2019 is welcome and we hope to see further improvement during the final 12 months of their development. Hiscox has issued its initial 2020 forecast at 12 months, ahead of other syndicates which wait until the 15 months stage. They show a small loss for syndicate 33 and a much larger loss for the SPA. Considering a part of COVID-19 falls into the 2020 year for Hiscox, the syndicate 33 estimate at this very early stage is as expected. The forecast loss for SPA 6104 is, however, again disappointing.

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