The Standard Club is set to withdraw from the Lloyd’s market from 2019, with Syndicate 1884 to be put into run-off.
The club established the syndicate in 2015 to underwrite marine and energy risks and has been its principal capital provider since.
The decision comes as the UK P&I mutual concluded that “current overcapacity and a weak pricing environment have made Lloyd’s a challenging environment for it to develop a profitable underwriting business with sufficient scale".
Nonetheless, the Standard Club said that it is “exploring alternative approaches to provide its members with additional insurance covers, including establishing an underwriting agency."
Syndicate 1884, which is managed by third-party turnkey provider Charles Taylor Managing Agency (CTMA), will write live business for the remainder of 2018 and will enter run-off on 1 January 2019 – a process that CTMA said it intends to manage.
In 2017, the syndicate booked gross written premiums of £89.3mn and reported a combined ratio of 156.5 percent.
Jeremy Grose, CEO of the Standard Club said: “Conditions in the Lloyd’s market are far more challenging today than they were when we planned the launch of the syndicate and it is the right decision to pull out now and allocate the capital to other initiatives.
“Lloyd’s represented a small part of our overall growth strategy. The plan is delivering in line with expectations. We are diversifying our business to provide an even stronger and more stable business to meet our members core P&I insurance needs.”
“Recent initiatives include helping to establish the highly successful Singapore War Risks Mutual and setting up an innovative mutual collaboration facility with Korea P&I,” Grose added.
In a separate statement, CTMA said that it believes there will be increased demand for live and run-off syndicate management capabilities in the Lloyd’s market.
CTMA chairman Barnabas Hurst-Bannister said: “We are very confident in the prospects for Charles Taylor Managing Agency, both as a manager of live and run-off syndicates. We established the managing agency as a third- party syndicate manager in 2015 and developed up-to-the-minute systems and processes, designed specifically for that purpose.”
Jon Hancock, performance management director at Lloyd’s, remarked: “Lloyd’s is pleased to continue to work with and support Charles Taylor Managing Agency. We are confident that Syndicate 1884 will be run-off in an orderly and professional manner and that policyholders’ interests will be protected.”