THE CHAIRMAN of Omega Insurance described 2010 as a “baptism of fire” as the Lloyd’s insurer slumped to a $42.8m (£26.3m) loss yesterday.
John Coldman, who was parachuted in a year ago after shareholders ousted his predecessor, said it had taken a $65m hit from catastrophes in the year.
But its loss was far bigger than the $18.9m consensus market expectation and a significant fall from its $43.6m 2009 profit. It occurred despite a 34 per cent increase in gross premiums written, to $356.1m from $265.8m in 2009.
“To say that ours was a baptism of fire would be an understatement,” Coldman said, adding that he was forced to issue Omega’s first profit warning a week after starting work.
“Subsequent events proved equally challenging. I am naturally very disappointed that we are reporting a loss.”
But he added that 86 per cent of the loss was incurred from business written in 2009 or earlier, before the board change. Chief executive Richard Pexton also said the previous management’s underwriting, reinsurance and data management was poor and had been overhauled.
Omega’s combined ratio rose dramatically to 114.4 per cent from just 81.4 per cent in 2009. It said it would not pay a second-half dividend “as a matter of prudence”. Analysts said the results were worse than expected and “disappointing”. Omega’s shares fell 17.87 to close at 82.75p.
TIME LINE | OMEGA BOARD CHANGE
Omega raises £130m from investors to fund growth, largely on strength of founder and chief underwriting officer John Robinson.
Robinson leaves the company.
Shareholder Invesco calls a special general meeting (SGM) to propose chairman Walter Fiederowicz and director Christopher Clarke are removed from the board.
12 March 2010
All SGM resolutions are passed and John Coldman becomes chairman. Directors Christopher Clarke, Clifford Palmer, Coleman Ross and Nicholas Warren step down and five new directors join the board.
19 March 2010
Chief executive Richard Tolliday dismissed and replaced with Richard Pexton.
31 March 2010
Omega says the earthquake in Chile “will have a material effect” on full-year profit.
Omega makes $34.2m (£21m) half-year loss; shares slump 11 per cent.
Canopius makes unsolicited bid for Omega.
Tolliday sues for unpaid remuneration.
Omega makes $42.8m full-year loss.