Nephila Capital’s specialty lines focused Syndicate 2358 at Lloyd’s continued to expand its operations in 2024, underwriting an impressive 84% more in gross premiums over the year, although its results were hit by losses due to the Baltimore Francis Scott Key Bridge collapse.2024 was the third full underwriting year for Nephila’s specialty lines focused Syndicate 2358 at Lloyd’s and saw the underwriting portfolio expand significantly., becoming the first vehicle from the company with a pure specialty lines of insurance and reinsurance underwriting focus.With more stamp capacity available to the syndicate in 2024, at $187.5 million (up on 2023’s $112.5m), this has been put to work in building-out the specialty lines portfolio.

Nephila Syndicate Management said that both 2023 and 2024 year’s of account are projected to be profitable, but noted “the 2024 calendar year result in isolation remains disappointing.” Here, we assume the firm is referring to the combined ratio for Syndicate 2358, which is reported at 98.5%, on a loss ratio of 61.8%, so higher than 2023’s 94.4% CR and 59.7% LR.“The past 12 months have been impacted by a significant level of space market losses, predominantly from the 2023 underwriting year, and the Francis Scott Key Bridge event on the 2024 underwriting year,” Nephila Syndicate Management explained in its report on 2358.Specialty reinsurance was the biggest growth line of business for Nephila Capital’s Syndicate 2358 in 2024, as it increased gross premiums to $61.7 million, up from $14.7 million in the prior year.

Property specialty came in at over $64 million of premiums for 2024, being the largest line, up from $41.7 million in 2023.Third party liability business grew to almost $46 million (from $29.75m), while marine, aviation and transport business doubled to $29.9 million (from $14.7 million).Nephila Syndicate 2358 also wrote more accident and health, as well as credit and surety business in 2024, but shrank in motor and legal expenses lines.

The 2022 year of account is now reported to have been closed with a return on stamp capacity of 12.9%, while 2023 is running at 8.3% but still open at this stage.Looking ahead, Nephila Syndicate Mangaement commented, “The unsatisfactory calendar year should not cloud the substantial efforts of the Nephila team to build and scale a truly differentiated specialty (re)insurance proposition.As the market cycle and enhanced underwriting models evolve, Syndicate 2358 will continue to refine its offering to best serve its capital providers and be a valuable source of capacity to underwriting partners.

“We have made significant progress during 2024 (and into 2025) to create the sound foundations from which to succeed during the industry’s next phase.” For 2025, the Nephila specialty lines Syndicate 2358 targets stamp capacity of $375 million, a further big increase from the $187.5 million utilised in 2024.That’s a doubling of underwriting firepower for the syndicate, so as long as specialty insurance and reinsurance market conditions remain attractive we should see another big increase in premiums underwritten after 2025...

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