CATASTROPHES this year piled pressure on Lloyd’s insurers Catlin and Hardy Underwriting, with the companies saying high levels of losses this year had cut into their profitability.
Catlin said its losses from the spate of disasters experienced this year had risen to $670m (£417m) from $534m initially estimated. It booked $275m in the first quarter alone after Japan’s earthquake in March.
Hardy said major catastrophes had pushed its combined ratio, a measure of its solvency, from a healthy 78 per cent to an unprofitable 111 per cent in the first nine months of this year. Anything over 100 per cent shows claims and expenses exceeding premium income.
Catlin chief executive Stephen Catlin said the “unprecedented” level of serious catastrophe losses, combined with low premium rates as insurers fought for business, was likely to cause a dramatic overhaul of the market for insurance.
“We believe that fundamental changes in the marketplace are on the horizon as a result,” he said.
Hardy also warned its losses could rise further due to “continued uncertainty regarding the New Zealand and Japan earthquake losses and the quantum of the claims arising from the recent flooding in Thailand.”
Catlin and Hardy wrote more business than in the first nine months of 2010 as they focused on the divisions seeing the biggest rate rises.
Catlin’s gross insurance premium revenue was £3.7bn, 12 per cent higher in the first nine months of 2011 than in the same period in 2010, as its reinsurance arm grew 26 per cent.
Hardy increased gross premium income by 21.8 per cent to £278.1m, as it too grew reinsurance and non-marine property divisions.