Forecasts & Results

MAP Syndicate 2791 and SPA 6103 2020 & 2021 Year of Account Forecasts

Posted 10.05.2022 – Quick takes

MAP has released an updated forecast for the 2020 year of account and an initial forecast for the 2021 year of account for syndicate 2791 and SPA 6103.

Syndicate 2791

The 2020 forecast is unchanged at between -5.0% and +2.5% of capacity, midpoint -1.25%.

An initial 2021 forecast has been set with a range of between -5.0% and +2.5% of capacity, midpoint -1.25%.

SPA 6103

The 2020 forecast has worsened to between -17.5% and -10.0% of capacity, midpoint -13.75%. The previous forecast range was between -15.0% and -5.0%, midpoint -10.0%.

An initial 2021 forecast has been set with a range of between -15.0% and -5.0% of capacity, midpoint -10.0%.

Alpha comment

It is not unusual for the forecast for the 2020 year of account for syndicate 2791 to remain unchanged at this stage of development. MAP tend to produce its initial forecasts on a standard formula which does not take credit for any underwriting profit until most of the risks have expired. Unlike most other syndicates, no account for any surpluses from the prior year reserves is included in the forecast until the year closes either. As this syndicate has generally benefitted from substantial prior year releases, we would expect the ultimate result to be positive. The initial forecast loss for the 2021 year of account is not unexpected, see comment above. The syndicate has a US-focused catastrophe book and therefore has substantial exposure to Hurricane Ida.  However, the initial forecast midpoint is over two points better than the 2017 and 2018 years of account, both of which ended up producing low single figure profits.

SPA 6103 is a quota share of the syndicate’s US catastrophe account and does not benefit from any reinsurance protection, unlike parent syndicate 2791. Therefore, it is not surprising given the high level of US catastrophe losses on the 2020 and 2021 years of account that both these years are forecast to produce double-digit losses. The slight deterioration in the 2020 forecast is apparently down to caution over increased claims costs in the US. The SPA does not benefit from any prior year releases as it is reinsured to close into parent syndicate 2791, therefore, these forecasts will only improve over time if the reserves held for the major losses are ultimately deemed to have been overstated.

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