28th Feb 2005 12:49
SVB Holdings PLC28 February 2005 28 February 2005 SVB HOLDINGS PLC Q4 2004 SYNDICATE RESULTS AND FORECASTS SVB Syndicates Limited, the Lloyd's managing agency owned by SVB Holdings PLC(SVB), today announces results for its managed syndicates on the 2002 Year ofAccount and forecasts for the 2003 and 2004 Years of Account. • Initial forecasts for the 2004 Year of Account indicate healthy profitability, despite the impact of windstorm losses • Forecasts for the 2003 Year of Account remain unchanged, showing strong profit levels • On the 2002 Year of Account, Syndicate 2147 closed profitably within the forecast range. For Syndicates 1007 and 1241, good pure year profitability was undermined by deterioration from past years. These two Syndicates will remain open until the uncertainty surrounding past years has diminished • Trading conditions remain favourable, with overall no material changes in rates and terms and conditions during January 2004 Year of Account Syndicate Capacity Owned by SVB Current Forecast £m % % 1007 215.6 81.9 7.5 - 15.0 2147 286.4 100.00 5.0 - 12.5 For Syndicate 2147, the impact of the US hurricanes and Japanesetyphoons during the year falls mostly on the 2004 Year ofAccount, but despite this we still expect it to be profitable.Syndicate 1007 shows an encouraging claims experience at thisearly stage, with a current net incurred loss ratio of 3%. Thecontinuing favourable trading environment suggests further goodprofitability. 2003 Year of Account Syndicate Capacity Owned by SVB Current Previous Forecast Forecast £m % % % 1007 151.0 79.1 13.5 - 18.5 13.5 - 18.5 2147 286.4 100.0 13.5 - 18.5 13.5 - 18.5 Both syndicates continue to show encouraging development for the2003 Year of Account, with net incurred loss ratios at 24 monthsof 6% for Syndicate 1007, and 26% for the shorter-tail Syndicate2147. For the 2002 Year of Account at the same stage the pureyear net incurred loss ratios were 16% and 35% respectively.Under these circumstances earlier forecasts of healthy profitability for both syndicates are reinforced. 2002 Year of Account Syndicate Capacity Owned by Outcome Previous Forecast £m SVB at 36 months % % % 1007 150.8 55.4 3.3 2.5 - 7.5 1241 168.9 99.7 (47.2) (25.0) - (20.0) 2147 154.0 100.0 12.5 11.0 - 16.0 Syndicate 2147 delivered a 12.5% profit, within the forecastrange. Syndicates 1007 and 1241, on a pure 2002 Year of Account basis,achieved profits of 15.5% and 8.3% respectively. However, during2004 there was further deterioration from business written inprior years, exacerbated by reinsurance exhaustion in somelayers. As a result of the continuing uncertainty surroundingthe run-off of the Discontinued Units, Syndicates 1007 and 1241will remain open at the 36 month stage. In the case of Syndicate 1007, the outcome at 36 months is stilla small profit, despite the damaging adverse impact from prioryears. Syndicate 1241, within which the great majority of SVB'sdiscontinued US casualty business now resides, is where theadverse effect of prior years has been particularly evident. Thedecision was also taken during December 2004 to commute theAdverse Development Cover contract, the cost of which was borneby Syndicate 1241. SVB provision in respect of Discontinued Units As at 30 June SVB established an exceptional loss provision of£103.6 million to absorb possible future reserve deteriorationfrom the Discontinued Units (liability reinsurance, healthcareand third party liability). This reflected the reservinguncertainty surrounding these classes. SVB's consolidated accounts, prepared under UK GAAP, remainsubject to audit. However, based on work to date, it isestimated that £26.4 million of the exceptional loss provisionhas been utilised in the six months since 1 July 2004. Thedecision to commute the Syndicate 1212 ADC contract added afurther £6.0m utilisation. As a result, £71.2 million remainsavailable to offset any future reserve deterioration from theDiscontinued Units. - ENDS - For further information: Matthew FoshSVB Holdings PLC 020 7903 7300 Nick MilesM: Communications 020 7153 1539 Notes to editors SVB Holdings PLC SVB Holdings PLC ("SVB") is an integrated Lloyd's vehicle.Operating through Lloyd's syndicates 1007 and 2147, SVB isdiversified by product and diversified by method of distribution. It underwrites a range of specialist direct andreinsurance risks. SVB's subsidiaries include Fusion InsuranceServices and Novae Underwriting. SVB aims to provide the Londonand regional markets with superior underwriting and first-classservice levels. For 2005 SVB's syndicates have combined premium capacity of £437million. SVB's contact addressSVB Holdings PLC71 Fenchurch StreetLondonEC3M 4HH This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Novae Group