Argo Managing Agency Ltd
Managing Agent Name: Argo Managing Agency Limited
Subject: Auction One Disclosure
Syndicate Affected: 1200
Establishment of a Special Purpose Syndicate (SPS) and Syndicate Pre-Emption
Argo Managing Agency Limited (AMA) has received the requisite capital provider approval to pre-empt the Syndicate’s capacity for the 2016 year of account by 21.43% (£350m to £425m). This proposed increase is conditional on final approval from Lloyd’s Capital and Planning Group (CPG). This approval is expected by 23rd October 2015.
The need for this increase is in the main attributable to the intention of establishing an SPS (provisional number 6127) at Lloyd’s to underwrite Chinese risks with effect from 1st January 2016, subject to Lloyd’s and other regulatory approvals. Heads of Terms were signed on 3rd September 2015 with Asia Capital Reinsurance Group Pte Ltd (ACRGP) (a subsidiary of ACR Capital Holdings (ACRCH)) to achieve this. The SPS will be managed by AMA and supported by a corporate member capitalised entirely by the ACRCH.
ACRGP currently underwrites a significant multi-class reinsurance portfolio from China based cedants, and a selection of this has been agreed between AMA and ACRGP to be underwritten in the first instance by Lloyd’s Insurance Company (China) Ltd (Lloyd’s China) . A team of underwriters with the appropriate expertise and local client knowledge will be transferred to Lloyd’s China from ACRGP. The Lloyd’s China resulting portfolio will be quota share reinsured to syndicate 1200. The new SPS syndicate 6127 will then 80% quota share reinsure syndicate 1200 leaving a 20% retention.
The selected portfolio will comprise existing facultative reinsurance and non-proportional treaty business including property and energy, marine, aviation and space, engineering, casualty and trade credit. There are also some new business areas planned that draw on the combined expertise of AMA and ACRGP. The portfolio is anticipated to represent approximately £30-35m of Gross Net Premium in 2016 to syndicate 1200.
The Board of AMA has approved a change to the syndicate’s investment strategy whereby the investment portfolio can now contain securities up to 10% of funds under management.
AMA has advised members’ Agents and Direct corporate participants that it will allocate up to a maximum of 2% of Syndicate capacity to staff for the 2016 Year of Account, the actual amount allocated to this vehicle is dependent upon staff take up of this offer. The capacity will be provided by Argo Group directly from its own corporate member. Argo Group will retain ownership rights of the capacity allocated to the staff LLP.
Date issued: 28th September 2015
Agency contact name: Mike Jackson/Richard Crinson
Agency contact no: + 44 (0)2077127600
For auction office use only: D2015011
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