Greenwich Group - Syndicate News

Duncanson & Holt Syndicate Management Ltd

	07 January 2000	Theakston 1101 ceases In a surprise announcement, Duncanson & Holt Syndicate Management Ltd informed capital providers that, despite all efforts, the Syndicate will not trade forward into the year 2000. The reason for this last minute failure was that discussions with the new Agency's prospective partner, Richmond Underwriting Ltd, have been discontinued due to further uncertainty regarding the Syndicate's forecast results for the 1997 and 1998 years of account. Apparently, forecasts were at the upper end of the ranges previously provided due to late notice of claims, and the situation with regard to the 1998 year is particularly uncertain. Work is currently in progress on year-end figures with the Syndicate's actuary and auditor, and Duncanson & Holt will communicate further developments in the near future.
	07 December 1999	Theakston update Brian Theakston has informed capital providers that the Syndicate's management is making every effort to ensure that it will be continuing for the 2000 Account, subject to contract. Following UNUMProvident's decision to withdraw from the Lloyd's market, it is unlikely that additional support will be in place as at 1st January, 2000 to replace the capacity lost. The Syndicate is planning to trade with a reduced Stamp, subject to the continuing support of Members' Agents and the satisfactory conclusion of a quota share arrangement. Excluding UNUMProvident's capacity, the Syndicate has a Stamp of Ł21.6m. Subject to Lloyd's approval, it is proposed that the quota share arrangement will increase the underwriting capacity to Ł40m.
	02 December 1999	D&H Update We understand from the LUAA that there is currently a 50/50 chance that Simon Spinney and George Lloyd-Roberts will continue to underwrite into the 2000 Account. A major U.K. company is carrying out due diligence work this week and if they proceed with the employment of Messrs. Spinney and Lloyd-Roberts it is not clear whether one, two or three of the existing Syndicates will go forward or whether the new employer will establish a completely fresh vehicle. Brian Theakston's Syndicate 1101 will continue for the 2000 Account. The Syndicate managers are talking to a major corporate backer in the hope of replacing the capacity lost through the withdrawal of UNUMProvident. Even if the talks come to nothing, the Syndicate will continue to trade with its Stamp reduced from Ł56m to Ł21m.
	29 November 1999	SHOCK DEPARTURE BY UNUMProvident Duncanson & Holt Syndicate Management Ltd. (DHSM) has, in the last few weeks, struggled to obtain new capital for its four Syndicates following UNUMProvident's decision not to back the Syndicates for 2000. This move took the market by surprise as it had been clearly understood that UNUMProvident would stand behind the Syndicates for the 2000 Account. This agreement, made as recently as 20th October, 1999, involved UNUMProvident guaranteeing capacity for Non-Marine Syndicate 55 (Ł34m out of a total capacity of Ł46m in 1999); Non-Marine Syndicate 1101 (Ł22m out of a total capacity of Ł54m in 1999); Marine Syndicate 1308 (Ł64m out of a total capacity of Ł90m in 1999); and Space Syndicate 1999 (Ł8.5m out of a total capacity of Ł15m in 1999). The U-turn was prompted by the deteriorating estimates for the Duncanson & Holt Syndicate Management's Syndicates. A statement from UNUMProvident said "recent deterioration in projected results of the Syndicates has led the company to this action, which will allow it to minimise and manage further costs and losses consistent with the related charge taken in its third quarter of this year". It is understood that the Duncanson & Holt Underwriters Board took this decision on 17th November after UNUMProvident had changed the articles for voting. Andy Ripley, Managing Director of DHSM, explained that "the one UNUMProvident member on the five-strong Board was given more votes, in effect the number of Directors plus two. This meant that the vote to pull the capital backing was won by six votes to four. The DHU board was emasculated". A statement issued to brokers and capital providers by the Managing Agency stressed the fact that the Board of DHSM had not agreed the late notice of termination of Managing Agents Agreements with D&H Underwriters. Andy Ripley commented that with the funds lacking, the only course of action would be to face reality and place the Syndicates in run-off. He further said that the Syndicates were in the process of being sold and Heads of Agreement had already been signed for Syndicate 1101. To date, UNUMProvident has provided approximately 75% of the capital of DHSM managed Syndicates and it was known that it was making an exit from the market next year. Earlier this year UNUM and Provident merged and made the decision to concentrate on disability insurance, its core business, simultaneously making an exit from its reinsurance operations in North America and Lloyd's. Apparently the insurer made a provision of approximately Ł128m in the third quarter to cover the run-off. Nearer to home, in September, DHSM ceased underwriting on Syndicate 957, placing its pooled reinsurance company, Duncanson & Holt Europe into run-off at the beginning of November. Lloyd's rules require Managing Agents to have the necessary risk-based capital in place by 26th November, however we understand that Andy Ripley is seeking some leeway from Lloyd's in view of these developments.
	07 October 1999	Duncanson & Holt and Richmond to form new Managing Agency The Board of Duncanson & Holt Syndicate Management Ltd has announced that it has reached agreement in principle for the transfer of the management of Syndicate 1101 to a new managing agent that will be owned by the senior management of Syndicate 1101 and Richmond Underwriting Limited. This transaction has now received approval from Lloyd's. Under the proposed agreement, the management and Richmond will form a new managing agent, to be called Trafalgar Syndicate Management Ltd, which will acquire the rights to manage Syndicate 1101 for the 2000 year of account. In addition, the current open years of Syndicate 1101 will be managed by Trafalgar Syndicate Management Ltd. Trafalgar Underwriting Agencies Ltd will remain a subsidiary of the Duncanson & Holt group. If required, Duncanson & Holt Underwriters Ltd, a Lloyd's corporate member, will provide Syndicate 1101 with a maximum of Ł15 million capacity, to be capped at 40% of total Syndicate capacity, for the 2000 year of account. The active underwriter will continue to be Brian Theakston. Syndicate 1101's underwriting team and agency management will remain as they were prior to the transfer of the syndicate to Duncanson Holt Syndicate Management Ltd.
	10 September 1999	Information for capital providers to Syndicate 1101 Subject to the approval of Lloyd's, the management of Syndicate 1101 is in the process of establishing a new Managing Agent for the purpose of managing Syndicate 1101 from 1st January, 2000. They are currently in discussions with Duncanson & Holt Syndicate Management Ltd. with regard to the transfer of the right to manage the Syndicate.
	07 July 1999	Ralph Sharp to remain on DHSM Board Ralph Sharp has agreed to remain on the Board of DHSM in a non-executive capacity.