Lloyd’s members increase capacity dealmaking by 59% in 2022 auctions

Lloyd’s members placed a final £900.4 million in bids for syndicate capacity in the third and final round of 2022 capacity auctions, securing a final £44.5 million in capacity in the 17 syndicates in trade.

Prices for the final round of 19.2 pence per pound of capacity were off 22.9% on average from the prior round or even as bids outweighed offers by 18 times. Prices ended 39% below the weighted average of the first two rounds of bidding. But eight of the 17 traded at a premium to round two and 5 traded at above the weighted average of the first two rounds.

For the full three rounds, the 2022 turnover of £74.2 million was up 61.5% from the prior year auction on a 58.5% increase in sold capacity to £254.57 million.

For round three, ERS specialist motor insurer syndicate 218 jumped out of obscurity to lead with £10 million of capacity changing hands.

Beyond 218, the list of most traded syndicates went to the 2022 usual suspects.

Argenta syndicate 2121 saw another £9.6 million in capacity change hands to bring its 2022 total to £32.5 million. Argenta Underwriting 3 picked up all but a fraction of the third-round supply tendered by directors, managers and staff, as had been the case in round two. For the three rounds total, 2121 is the cheapest capacity going.

Beazley syndicate 0623 was the most traded throughout the 2022 auctions, including the third highest capacity traded in round three where prices were actually up a fraction against round two. The buyer pool remained quite broad.

Trade in Tokio Marine syndicate 0510 slowed for the third and final round after having been a leader in the prior two. Prices have been relatively stable throughout. Entitles tied to Argenta Private Capital joined the buyers, picking up a small stake along with Tokio Marine which dominated the three rounds of buying.

Trading in Lancashire syndicate 2010 also slipped, but the syndicate remains the fourth most traded overall in 2022 and prices have held stable throughout. Corporate member / candidate Cathedral Capital again picked up the full ticket.

The 2022 top four – Tokio Marine 510, Beazley 623, Lancashire 2010 and Argenta 2121 – ultimately accounted for two thirds of traded capacity and just over half of trading volume.

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