Subject: 2012 Year of Account – Auction 4 – Utilisation of Stamp Capacity
Syndicate(s) Affected: 260
Canopius Managing Agents Limited (“CMA”) confirms that it has been advised by Lloyd’s that Syndicate 260 (“the Syndicate”) will be entered into Auction 4.
The trigger for this decision is that a material change (as set out in Auction Rule 4(4)(b)(iv)) in the Syndicate’s business plan is deemed to have occurred, on the grounds that the utilisation of capacity in its approved business plan (65%) is lower by over 10% than the 81% utilisation of capacity in the Syndicate Business Forecast (“SBF”) disseminated in July.
This information was contained in disclosure D2011006, in which CMA announced its decision to maintain the syndicate allocated capacity of the Syndicate for the 2012 year of account at its current level of £69,853,687, rather than reduce this to £55,000,000 (as originally proposed). This move is intended to provide adequate headroom should any potential business development opportunities generate premiums over and above the levels contained in the current SBF . At the same time, CMA announced that it had decided to waive its right to collect part of its managing agent’s fee in order to ensure a cost-effective approach to the calculation of agency fees. This discretionary reduction applies to the 2012 year of account only.
This change in capacity utilisation results predominantly from a movement in stamp capacity rather than a change in gross premium forecast (which has increased slightly over this period).
Summary of business plan Approved Original
|
|
(£m) |
(£m) |
Stamp capacity |
|
69.853 |
55.000 |
GWP |
|
53.926 |
52.585 |
Acquisition costs |
|
8.187 |
8.065 |
GNWP (Lloyd's Stamp Gross Premium) |
|
45.739 |
44.520 |
Utilisation |
|
65% |
81% |
Forecast result |
|
-2.639 |
-3.026 |
Result as % stamp capacity |
|
-3.8% |
-5.5% |
The approved business plan result is made on a prudent and realistic basis, taking account of the difficult UK motor market environment. Despite this background, we will continue to seek further improvements on the forecast position by targeting additional specialist vehicle business and with a focus on underwriting profitability and customer service.
Date issued: 7 November 2011
Contact Information
Agency contact name: Bradley Cass
Agency contact no: + 44 (0) 207 337 3798
For auction office use only: D2011032
