CATASTROPHE losses in the first three months of 2011 have “changed the market” for insurance firms and pushed up rates, Lloyd’s insurer Hiscox said yesterday.
Bermuda-based Hiscox wrote eight per cent less business in the first-quarter compared with the same period in 2010 as it pulled back from insuring risk at unprofitably low rates.
But it said losses from disasters in Japan, New Zealand and Australia had stopped reinsurance rates from falling. Rates are already back to 2010 levels in most areas and are even higher in the Asia-Pacific region, it said in its interim management statement.
Chief executive Bronek Masojada described the market conditions as “tough” but said the pull-back from underwriting “has allowed us to keep our powder dry”.
“We are ready to take advantage of rising reinsurance rates,” he said.
It expects to see rate rises when policies are renewed in June and July, with potential ten per cent gains in US catastrophe rates.
Gross written premiums in the quarter fell to £453.5m from £504.1m in 2010, driven largely by a 19.8 per cent fall in the London market as it cut back its reinsurance and professional indemnity exposure.
But its retail UK business saw gross premiums rise by 9.3 per cent to £86.2m, from £79.8m in 2010, and in Europe it raised premium income by 3.5 per cent to €64.3m (£56.2m).