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Beazley’s third-party capital backed Smart Tracker approved as full Lloyd’s syndicate


From January 1st 2023, specialty insurance and reinsurance underwriter Beazley’s Smart Tracker special purpose arrangement (SPA) syndicate 5623 will now become a full market-facing syndicate at Lloyd’s.

beazley-logo-new-nov2022Beazley said this morning that Lloyd’s has approved its applications and plans for turning the Smart Tracker into a full syndicate.

As a result, from January the Smart Tracker will become full Syndicate 5623 at Lloyd’s, with £340 million of stamp capacity for 2023.

The Smart Tracker Syndicate 5623 will have a business plan to underwrite gross premium of $425 million, Beazley said.

It will continue to provide follow capacity across a diversified mix of classes, offering access to the Lloyd’s specialist marketplace with a low expense ratio.

Will Roscoe, who has managed the Smart Tracker since 2019, has been appointed as the Active Underwriter for the new Syndicate 5623.

Adrian Cox, CEO Beazley, commented on the news, “As a pure follow syndicate, 5623 offers a market-leading expense ratio and access to carefully selected market facilities and consortia. Since launch in 2018, we have proved we can provide brokers and clients with efficient, light-touch follow capacity, while also returning an underwriting profit to Beazley and our third-party capital partners, and it is pleasing that Lloyd’s has recognised this success by granting full syndicate status.”

The third-party capital backed Smart Tracker is one of Beazley’s underwriting structures that attracts institutional investor capital, akin to an insurance-linked strategy, that augments its underwriting capacity in the market while also enabling it to earn fee-like income and provides for a low-cost source of risk capital for clients.

Beazley’ SPA Syndicate 5623 was launched at the beginning of 2018  with plans to take a 75% quota share of broker facilities business that the company underwrote through its Syndicate 3623, with backing from third-party institutional level investors.

Backers included well-known pension investors that allocate to insurance-linked securities (ILS) and it’s always been apparent that this would prove to be an attractive vehicle, as investors looked to back Beazley’s underwriting to access a differentiated source of returns.

As we previously wrote, investor appetite for differentiated insurance or reinsurance-linked returns has been rising significantly and the London market continues to be seen as a venue where this can be achieved, with the right partnerships and structures.

Beazley has developed a unique access point to London market risks from its portfolio, that investors find attractive and the company has reported both continuing performance improvements for the Smart Tracker and also very strong investor demand.

Earlier in 2022, Beazley said the Smart Tracker was “significantly oversubscribed by third party capital”.

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