AmTrust has jettisoned its Lloyd’s marine business - which is thought to be worth up to £30mn ($39.9mn) - in a shock decision announced earlier this week, re-Insurance.com can reveal.
It is understood that the cargo, hull and marine liability lines of business have all been axed.
AmTrust’s marine team is headed up by industry stalwart Peter Townsend, whose role is understood to be under consultation along with eight other employees.
Townsend joined AmTrust from Swiss Re in November 2015 - and the beleaguered US insurer’s Lloyd’s syndicate began writing marine business the following year.
The business is written through AmTrust’s £284.4mn Syndicate 1861, which reported a £29.2mn loss for last year as a result of a combined ratio that ballooned to 116.7 percent.
That was partly driven by an £11.7mn loss in its cargo, marine excess of loss and treaty book largely as a result of the onslaught of hurricanes in the third quarter of last year. Meanwhile, in its syndicate accounts for the year, AmTrust said the marine liability book “performed well”.
AmTrust does not break out the size of its marine book, but in 2017 it wrote £49.3mn of marine, aviation and transport business. That marked a significant increase on the previous year when it booked £32.6mn of premium in the division.
During 2017, Syndicate 1861 also wrote a £13.3mn line for a marine hull consortium with another AmTrust syndicate 1206, which led the programme.
The decision to exit the class comes amid a wider crack down by Lloyd’s, which has threatened to close syndicates that consistently underperform.
Three of the seven classes in the Corporation’s sights are marine hull, cargo and yacht business.
Last week, re-Insurance.com revealed that Lloyd’s had issued a specific warning to marine underwriters, which it said must improve or they face being barred from operating in the sector.
However, AmTrust is not understood to have been the target of any warnings.
Lloyd’s focus on the marine market follows a devastating 2017 for the class as syndicates writing marine business posted an eye-watering underwriting loss of £469mn ($637.7mn), making up nearly a quarter of the Corporation’s £2bn pre-tax loss for the year.
Last year’s loss marked a drastic deterioration from just three years ago, when the marine class posted an £84mn underwriting profit.
AmTrust is not the only carrier to consider its position in the marine market in the wake of last year’s catastrophes.
In December Sirius’ Syndicate 1945 placed its marine cargo, treaty and yacht books of business at Lloyd’s into run off.
“We can confirm after a strategic review that we are exiting the marine cargo, hull and liability lines of business with immediate effect. We are excited about the potential for existing and new lines for the rest of 2018 and beyond,” an AmTrust spokesperson told this publication.