SVB GAINS FROM 2003, BUT DISCONTINUED UNITS CAUSE H1 LOSS

Lloyd’s managing agency SVB Syndicates has reported “further encouraging development” for its 2003 year of account and has upgraded Syndicate 1007 from between 10% and 17.5% to 12.5% to 17.5%. Syndicate 2147 been upgraded from between 8.5% and 16% to between 12.5% and 17.5%. However, this good news was overshadowed by the fact that discontinued units, which reside principally in Syndicate 1241, saw estimated losses for 2002 increase by 18 points to between minus 15% and minus 20%, which SVB said would push it into a small operating loss for the first half. In early trading the company’s share price plunged by more than a quarter to 25.5p. SVB said that the second quarter was affected by large contract loss reviews on four liability reinsurance contracts, in addition to the 19 reported in the first quarter. The company anticipated that, absent any further major catastrophe losses, it would achieve an operating profit for 2004 in the region of £43m. It has appointed run-off specialist Omni Whittington “to evaluate future strategy for the run-off of policies written by the discontinued units”. SVB has also allocated an additional £103m “discretionary provision” at group level “in respect of potential future claims from discontinued units”.