CEO Review of 2020

Ash Bathia, CEO & Active Underwriter, looks back at 2020 and shares his vision for the future at Probitas.

“As we draw a close to our fifth full underwriting year, it’s a privilege to see the considerable progress we have made over this time. Building a high-calibre, experienced and diverse team, complemented by our applied use of market-leading analytics and an actuarial capability, which sits at the front and centre of the business.

The improving market conditions we have witnessed since the second half of 2018 have continued in 2020 following the contraction of capacity driven by a combination of elements Whilst this was certainly the case it has been further exacerbated by the impact of Covid-19 related claims and the prospect of a diminishing investment performance ins 2020. And, I expect this momentum to continue in 2021.

Probitas remains resolute in its quest to deliver strong and sustainable underwriting results. I am pleased to report that the execution of our underwriting strategy post-2017, together with the implementation of a robust performance monitoring and portfolio optimisation framework, we have continued to have a significant positive impact on the Syndicate’s bottom-line result. This is borne out by the actual performance of the 2018 pure underwriting year of account and also the forecast results of both the 2019 and 2020 pure underwriting years of account, as well as the 2020 GAAP year result.

2020 was also a memorable year for us, as we were granted ‘in principle’ approval by Lloyd’s to set up our own manging agency, Probitas Managing Agency Ltd (PMAL). The regulatory approval process is well underway and, with a full complement of high calibre resources including the appointment of the Chairman designate Steven Burns, and two independent non-executive directors, Mel Goddard and Hilary Weaver. We’re excited about where our formidable team can take the business.

We continue to focus on its vision and strategy to build a scalable, sustainable, and profitable business underpinned by some core principles:

  • Focus on core commercial classes of non-US Property, Casualty and Financial Lines.
  • Limited appetite for Delegated Underwriting Authority, high conduct risk exposure and incidental mainland USA exposures.
  • An emphasis on SME’s and mid-market business, providing cross-class solutions
  • Diverse and cost-effective distribution model
  • Embedding technology and data analytics front and centre
  • Exemplary underwriting discipline underpinned by robust performance monitoring using real-time management information.

Combined with our strong underwriting discipline and favourable market conditions we are on track to deliver a third successive year of market-leading performance. Probitas was also granted approval for a mid-year pre-emption.

I am pleased to report that the current ultimate net combined operating ratio, for the 2020 pure year of account is forecast at 87.8%; on the back of the 2019 pure year of account forecast ultimate NCOR of 86.3% and 2018 pure year of account NCOR at 89.8%.

I am also delighted to report that the Syndicate’s UK GAAP NCOR result for the year ending 2020 is 85.6%. Achieved against the backdrop of some extraordinary and unprecedented times brought about by the pandemic. We have, as a team, continued to meet these challenges with a limited impact on our business as a result of:

  • Effective Business Continuity Plans – the whole business successfully continues to operate remotely with regular engagement with all team members, including weekly team meetings; staff feedback surveys and 1-2-1 consultations to ensure that all employees are fully supported.
  • Limited financial impact of Covid-19 claims
  • Creation of an inhouse Covid-19 Taskforce

As we move into 2021…

..we remain focussed on the task at hand – with our attention on robust performance management, continuous performance improvement and portfolio optimisation. At the same time, we are resolved to continue to deliver operational efficiencies by investing in and building a more efficient, scalable and cost-effective operating model, which will assist in the delivery of year on year material improvements.

We are on track to deliver a top tier underwriting result for the third year in succession. The team have demonstrated remarkable resilience and resolve in the face of some significant adversity in our early phase of development and in meeting the more recent and unprecedented challenges of the global pandemic.

It is a great testament to the hard work, discipline and resolve of the entire team.

We are looking forward to building further on these strong foundations to deliver another positive performance in 2021 against the backdrop of favourable market conditions and establishing a high calibre managing agency with robust governance and compliance framework.

Whilst the global pandemic has truly tested the human capacity to adapt and cope with events that none of us has witnessed before. Collectively, our resolve and resilience mean that we will come through this wiser, stronger and more appreciative of many of the privileges we enjoy, but often take for granted.

I’d also like to take this opportunity to extend my huge gratitude to each and every one of my Probitas colleagues for their conscientiousness and amazing dedication to the business. It absolutely speaks volumes for their professionalism and determination and a testament to the strong ethos, values and culture which define our behaviours and the team spirit that we have built.”