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Apollo Syndicate Management Limited

Managing Agent Name: Apollo Syndicate Management Limited

Subject: General Update

Syndicate Affected: 1969

This statement has been prepared by Apollo Syndicate Management Limited (“Apollo”) for the purpose of disclosing to existing and prospective underwriting members of Syndicate 1969 (the Syndicate) information which may be of relevance to such members in considering their participation for the 2018 year of account (“YOA”).

Members are also referred to the Business Plan Narrative for the 2018 YOA, other SBF documents, and the Syndicate’s latest quarterly returns, all of which have either been provided or are available to members (or their representatives as appropriate), and include information on various relevant developments within the Syndicate.

Impact of Q3 2017 catastrophes on Syndicate 1969

At the time of writing, the Apollo governance process around the Q3 results is ongoing.   Management does, however, expect the impact of the recent Catastrophe events (Hurricanes Harvey, Irma and Maria plus the two Mexican earthquakes) (“the events”) on the 2016 and 2017 years of account results to be material, albeit within expectations.

The current point estimate for the events in aggregate is $47.6m (net of reinsurance and outwards reinstatements premiums).  This should be split approximately 75% to the 2017 year and 25% to the 2016 year.  These are early estimates and subject to considerable uncertainty.

Consequently, both years of account are currently expected to close at an underwriting loss, although the level of those losses is uncertain at this stage, particularly in relation to the 2017 year, which is still very early in its development.

Apollo will provide early sight of the Q3 QSR data once it has been submitted to Lloyd’s to enable members to better understand the impact on their solvency position at Q3.

Syndicate Capacity and the Special Purpose Arrangement (“SPA”)

Lloyd’s has agreed the 2018 Syndicate 1969 business plan, with a capacity of £260m (comprising SPA capacity of £35m and S1969 capacity of £225m).

Lloyd’s Franchise Board has also granted Apollo “in principle” approval to establish SPA 6133 that will reinsure a portfolio of property catastrophe business underwritten into Syndicate 1969 by Mark Rayner.

Board changes

Mark Rayner has been appointed as a director of Apollo, with effect from 4th November 2017.  All necessary regulatory approvals have been received.

Jayne Owen, an independent Non-Executive Director (“iNED”), has announced that she will be retiring from the board in 2017.  The recruitment of a replacement iNED is underway.

Consortium Fees

Apollo proposes to change the allocation of fees received in respect of consortia it leads.   Previously all fees were allocated to S1969, however this did not recognise the fact that Apollo does not receive a managing agency fee on the premium income written on behalf of the consortium partners.  Consequently, the intention is to compensate ASML for this by allocating a proportion of the consortium fees to ASML.

Connected Party – Cyrene Capital Limited (“CCL”)

Members are advised that CCL is a corporate member which participates on S1969.   CCL is considered a ‘connected person’ within the context of the Lloyd’s capacity auction framework by virtue of it being a 100% subsidiary of Apollo’s parent entity, albeit the underwriting is supported by third party FAL.  From time to time, CCL may participate in Lloyd’s capacity auctions as a tenderer or subscriber of capacity in respect of S1969.

Date issued: 27th October 2017

Contact Information

Agency contact name: Andrew Gray

Agency contact no: + 44 (0)203 169 1970

For auction office use only: D2017009

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