Here we go again, it’s that time of year when companies release their full-year results and once more it’s a mixed bag from the (re)insurance firmament.
You might be forgiven that 2010 had not been kind to carriers, what with all those natural disasters such as earthquakes in Chile and New Zealand, freezing winters in Europe and the US and floods seemingly everywhere.
Not to mention a prolonged soft market in most classes of business.
But, there was plenty of good news, although that can depend on how you look at these things.
Swiss Re for instance, prompted some almost contradictory headlines after it revealed its results. ‘Swiss Re Makes Loss After Loan Repayment’ was the headline in the Wall Street Journal.
And the company did make a loss in the final quarter of the year after repaying of a costly loan from Warren Buffett-owned rival Berkshire Hathaway. However as Reactions headline pointed out ‘Swiss Re posts $863mn profit for 2010’, which hinted at a slightly rosier outlook.
Meanwhile, The Insurance Insider covered all bases with its ‘Swiss Re profits up 74% despite Berkshire repayment drain’ headline.
Other reinsurers that enjoyed a good year included XL Group, as Business Insurance reported its net income for 2010 was up to $585.4mn from $206.6mn in 2009, a 183% increase.
Other reinsurers did not fare so well as the same publication reported that Arch Capital Group’s full-year net income had slipped to $816.7 million, compared with $851.1 million in 2009, as profits for the fourth quarter took a hit from Australian flood losses.
And things were worse at fellow Bermudian, PartnerRe, which reported $852.6mn in net income, a 44.5% decrease from 2009. The company blamed catastrophe losses, large loss events and lower reinvestment rates.
Bermuda-based Lloyd’s insurer Catlin Group’s pretax profits fell 33% to $406 million in 2010, as it suffered from a year of heavy catastrophe losses.
However, another foreign-domiciled Lloyd’s carrier, Beazley, reported pre-tax profits of $250.8mn up from $158.1mn in 2009.
Beazley said the increase was caused, in part, by a one-off foreign exchange gain after the insurer and reinsurer changed its reporting currency to US dollars from pounds sterling, and by releases of prior-year reserves.
And in the US casualty specialist WR Berkley’s full-year net income rose by 45 percent to reach $449mn as the firm bounced back from heavy investment losses in 2009 while HCC “crept down by just 2.5 percent to $345mn in 2010, as the company largely withstood the combined challenges of high industry cat losses, torpid investment returns and falling rates” according to The Insurance Insider.