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Lloyd’s syndicate quits Asia, but Australia not affected

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Lloyd’s syndicate ArgoGlobal has announced plans to withdraw from Asia in a bid to return the business to profitability after another year of losses.

It will also put most of its hull underwriting business into runoff.

The pullout will not affect the Australian market, where the syndicate writes business through delegated authorities.

“That book is managed directly out of London, hence there will be no impact on our Australian clients,” Head of International Marketing and Producer Management Ewelina Kudla told insuranceNEWS.com.au.

She says gross written premium (GWP) from Australian accounts makes up less than 5% of the syndicate’s book.

ArgoGlobal, the trading brand of Syndicate 1200, announced the pullout yesterday. The move will allow the business to focus on markets that offer more profitable growth.

Group Head of International Operations Matt Harris says ArgoGlobal has “taken deliberate steps to improve profitability in Syndicate 1200 and ultimately enhance shareholder value” over the past two years.

“We’re executing this through underwriting actions, increased rates and a focus on digital technology to improve underwriting margins.

“The ArgoGlobal Syndicate 1200’s Asia business recently recorded combined ratios are unsustainable and, while we still see growth opportunities in the region, we need to prioritise our efforts on profitable growth in other markets.”

While the syndicate will be ceasing most of its hull underwriting business, it remains committed to the remaining marine classes it insures, including hull accounts on non-Lloyd’s platforms.

The syndicate narrowed its loss last year to £35.9 million ($64.3 million) from £112.3 million ($201 million) in 2017, according to its financial report.

Argo Managing Agency, which manages the syndicate, has signalled that becoming profitable again is a key priority.

“It is imperative that the business returns to consistent profitability,” Chairman Tony Latham says in the report.

“To achieve that we must continue to adhere to underwriting plans and remain committed to achieve rate increases where needed.

“It is also critical that we drive down the cost of acquiring business, which remains too high. Where we believe market conditions do not allow a line of business to be profitable, then we shall exit those lines.”