SNL Financial's new Lloyd's syndicate data shows that Catlin Group's primary syndicate remains top of the pack when ranked by 2013 gross written premium. But with fresh market share potentially up for grabs, could the top dog lose its spot?
Catlin Underwriting Agencies's Lloyd's Syndicate 2003 generated gross written premium of £1.92bn in 2013, good for a 7.34% market share that was nearly 2 percentage points ahead of Amlin Underwriting's Lloyd's Syndicate 2001. That maintained a No. 1 ranking acquired following its parent company's acquisition of fellow Lloyd's insurer Wellington in 2006.
But as syndicates struggle with a new wave of price softening, fresh market share could arise in a saturated marketplace. And with Catlin unlikely to expand on its position, the jury is out on who may be poised to benefit.
The Lloyd's market is a significant profit driver for Catlin, which generated roughly 46% of group premium from the marketplace in 2013. SNL data shows that Syndicate 2003 featured in the top five in each of the three largest Lloyd's lines of business in 2013.
But management is now looking further afield. The group is building up its US and international business, and management has said this is where it foresees growth, with the London business consolidating its market position.
"Bermuda has probably been higher-margin business for Catlin in recent years, but the syndicate is the biggest profit contributor," Ben Cohen, an insurance analyst at Canaccord Genuity, told SNL. "The question is how much they scale up in the US and the international business, because I don't think anyone would forecast that the syndicate is going to grow very much in the next few years."
Indeed, Canaccord forecasts that gross written premium will shrink 4% in both 2015 and 2016.
Amlin holds a similar position in terms of where it finds the majority of its premium. Its syndicate-which comprises both Amlin London and Amlin UK-delivered near 60% of group gross written premium in 2013. Canaccord expects flat premium growth at the syndicate for 2015 and 2016.
Cohen noted that neither of the top two syndicates is likely to have to fight to keep its existing Lloyd's market share, "but they are going to need to justify the probability of what they are doing." However, scope remains for smaller syndicates to grow their existing piece of the pie.
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