Blenheim ceasing to write a Property Treaty book in syndicate 5886

Posted 08/06/2023 – Quick takes

Last month, we were advised that Blenheim syndicate 5886 would cease writing property treaty business from 1st June. After six consecutive years of major catastrophe losses, the evident effects of climate change, inflation and recently the lack of availability of effective reinsurance were cited as reasons for ceasing writing property treaty business. Instead of continuing to write a heavily exposed catastrophe treaty book, the syndicate will seek to write additional direct business via Simon King’s property D&F book, which is enjoying some of the best market conditions for two decades.

Alpha comment

The underwriting team had a strong property treaty focus both at Blenheim syndicate 5886, and previously at Lancashire syndicate 2010, particularly in regional US business, where it was a market leader. This news came, therefore, as a surprise to the market. However, the property treaty book of syndicate 5886 has lost money in all years since it started in 2017 due to high levels of catastrophe losses, outweighing some good profits being earned from the D&F book. We heard from Simon King & Simon Anthony in our recent Conversation with an Underwriter series, that a ‘unique set of circumstances’ meant large pockets of business were now at historically high prices and that Blenheim was seeking to be nimble and write more business in this ‘truly hard market’. This is now an opportunity for the syndicate to capitalise on this strong market and hopefully ensure that it can start to make decent profits to reward the capital providers who have been so patient in recent years. We fully support this move, as we had been seeking a significant reduction in the treaty book in the last few years.

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