Key findings include:
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The Lloyd’s market began 2015 with 92 active syndicates and slightly reduced underwriting capacity of GBP26.0 billion.
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This includes over GBP0.5 billion of ‘sidecar’ quota share capacity provided by 14 Special Purpose Syndicates (SPSs).
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Eight Lloyd’s managing agents now oversee more than GBP1.0 billion of capacity, namely Catlin, Tokio Marine Kiln, Beazley, Hiscox, Amlin, QBE, Brit and Liberty.
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Including sidecar support, the capacity of the ten largest syndicates aggregates to GBP11.1 billion in 2015, or 42% of the total market. Average syndicate capacity stands at GBP331 million.
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China Re Syndicate 2088, a former SPS, now operates on a standalone basis and April 1, 2015 saw the launch of a new operation, Syndicate 1884, backed by The Standard Club.
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SPSs continue to be a popular entry route for new and existing investors, with four new vehicles established so far in 2015. Backers include Credit Suisse Asset Management and Korean Re.
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Four Lloyd’s operations gained new owners in the first half of 2015 (Ariel Re, Brit, Catlin and Sportscover) and three further deals await customary approvals (Pembroke, Montpelier and HCC).
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Gross premiums written totalled GBP25.3 billion in 2014, up 2% at constant exchange rates. Reinsurance volumes fell by 10% to GBP8.5 billion, driven by lower property catastrophe pricing.
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Underwriting profit of GBP2.3 billion (2013: GBP2.6 billion) equated to a combined ratio of 88.1% (86.8%). Prior year reserve releases were stable at GBP1.6 billion, providing 8.0pp of benefit.
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The total investment return rose by 25% to just over GBP1.0 billion in 2014, a yield of 2.0% (2013: 1.6%), driven by unrealized gains on longer duration bonds.
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Overall operating performance remains strong. Pre-tax profit was almost unchanged at GBP3.2 billion in 2014, representing a return on capital employed of 14.7% (2013: 16.2%).
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Overall net resources (capital, reserves and subordinated liabilities) grew by 11% to a record level of GBP23.5 billion at December 31, 2014.
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Lloyd’s has been liaising closely with the UK regulators over its preparations for the implementation of the Solvency II regime and these are nearing completion
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