By Henry Gale

April 8 - (The Insurer) - Lloyd's syndicates dedicated to smart follow underwriting wrote more than $1.8 billion in gross written premiums during 2024 as more market participants invested in enhanced underwriting capabilities.

The syndicated nature of the London market has given rise to smart follow business models in recent years. Automated rules and processes allow syndicates to write follow business without humans involved in individual risk decisions.

These include algorithmic players such as Ki, which uses machine learning models trained on historic underwriting data to judge which open-market risks to write and at what price.

Humans are involved in setting the insurer's appetite, managing portfolio exposures and handling relationships with distribution partners.

"Tracker" or portfolio underwriters such as Beazley's Smart Tracker Syndicate 5623 follow specific leads in particular lines of business systematically on a portfolio basis, sometimes filtering risks by other simple criteria too.

Some Lloyd's insurers, including Liberty and QBE, use smart follow approaches within syndicates that also underwrite on a more traditional basis, while several others are dedicated to smart follow.

These underwrote more than $1.8 billion in GWP in 2024, an increase of nearly 17% from 2023. While Ki Syndicate 1618's premiums decreased, the other follow-only syndicates, which underwrite on a tracker basis, all expanded by at least 25%.

Syndicate 1618, which is backed by Blackstone and Brit’s parent Fairfax Financial, wrote $800.9 million in GWP last year, down 8.75%. The contraction reflected portfolio remediation in several historically volatile classes, a reduction in prior year gross premium estimates, as well as competitive market conditions, according to the syndicate.

Acrisure's Flux Syndicate 1985 grew the most relative to its size, more than doubling its premiums from its launch year 2023.

The syndicate underwrote $199.2 million in GWP in 2024, more than double the $92.3 million reported in its first year of operation. It is one of a handful of Lloyd’s syndicates which has intermediary ownership ties – in its case, the US consolidator Acrisure.

Flux, Beazley's Smart Tracker 5623 and Nephila Syndicate 2358 all increased their gross written premiums by more than $100 million.

All recorded an underwriting profit for the year, with combined ratios between 90% and 98.5%, slightly above the overall Lloyd's market combined ratio of 86.9%.