Tokio Marine Kiln has released update forecasts for syndicates 510 and 557
Posted 08/11/2021 – Quick takes
TMK has released updated forecasts for syndicates 510 and 557.
The 2019 forecast has improved to a loss of between -7.4% and -2.4% of capacity (midpoint -4.9% loss). The previous forecast range was between -12.3% to -2.3% (midpoint -7.3%) of capacity.
The 2020 forecast is unchanged at between -2.5% and +2.5% of capacity (midpoint breakeven result).
The 2019 forecast range has improved to between -0.5% to 4.5% of capacity (midpoint +2.0% profit). The previous forecast range was between -3.5% to 1.5% (midpoint -1.0%) of capacity.
The 2020 forecast has improved to between -13.2% and -8.2% of capacity (midpoint -10.7% loss). The previous forecast range was between -15.2% and -10.2% (midpoint -12.7%) of capacity.
Alpha Comment: It is encouraging to see the 2019 year of account forecast improve further, with the current midpoint forecast some 5 percentage points better than it was 6 months ago. Substantial COVID-19 reserves are held on this year of account and although it may be too early to release these at the close of the year, TMK has a good track record for prior year reserve releases, which means this year of account result could end up improving further towards a breakeven position. Additionally, Brad Irick, CEO of TMK, has advised that he expects the 2020 year to close ultimately in profit, which is reassuring. Forecasts for both years of account for syndicate 557 have improved, with the 2019 year of account hopefully producing a single figure profit but a loss on the 2020 year of account looks inevitable.