Forecasts & Results
Hiscox Syndicate 33 and SPA 6104: 2020 & 2021 Year of Account Forecasts
Posted 10/08/2022 – Quick takes
Hiscox has released updated forecasts for the 2020 and 2021 years of account for syndicate 33 and SPA 6104.
Syndicate 33
The 2020 forecast has improved to between -4.8% and +5.2% of capacity, midpoint +0.2%. The previous forecast range was between -7.5% and +2.5%, midpoint -2.5%.
The 2021 forecast has improved to between -3.6% and +6.4% of capacity, midpoint +1.4%. The previous forecast range was between -4.1% and +5.9%, midpoint +0.9%.
SPA 6104
The 2020 forecast is has improved to between -3.2% and +6.8% of capacity, midpoint +1.8%. The previous forecast range was between -13.4% and -3.4%, midpoint -8.4%.
The 2021 forecast has improved to between -16.1% and -1.1%, midpoint -8.6%. The previous forecast range was between -19.5% and -4.5% of capacity, midpoint -12.0%.
Alpha Comment
We are very pleased to see the forecasts for both years of account for syndicate 33 and SPA 6104 improve this quarter. Both open years for syndicate 33 are now forecasting small profits, which based on the syndicate’s forecasting methodology should improve further prior to closure. Having closed each of the last three years with losses, this would be a welcome return to profitability for the syndicate, which has significantly remediated its portfolio over this time. Volatility (and possibly excessive conservatism, remembering the huge improvement (c90%) between first estimate and close of the 2019 Year of Account) is still inherent in the forecasting of SPA 6104, as the midpoint for the 2020 year of account has improved by more than 25 points since the initial forecast and is now a midpoint profit. Whilst we like the forecasts to continue to move in the right direction, the scale of the improvements in the forecasts for the reinsurance book do suggest that we should perhaps take their initial very cautious forecasts with a pinch of salt.
