Blue Capital Re announces 2017 loss
Blue Capital Reinsurance Holdings made a first quarter 2018 profit of $0.5 million, down heavily on the $4.1 million it made over the same period of 2017.
The company said that business written decreased by almost a third in the first quarter of 2018 compared with the same period a year before, despite positive rate increases.
Reinsurance premiums fell to $12.5 million in the quarter, decreasing by $4.5 million over the same period a year ago when it wrote $17 million of business.
According to Blue Capital the decrease was a result of reduced writings driven by a smaller capital base and greater cessions to third party reinsurers, partially offset by an average risk adjusted price increase of 12 percent during the January renewals.
“The first quarter results were adversely impacted by an increase in reported losses related to Hurricane Irma as claim settlements and related loss adjustment expenses were greater than originally expected,” said Michael McGuire, chairman and chief executive officer.
“Pricing continues to show positive momentum, and as we previously reported, we achieved improved pricing during January renewals. The market improvements coupled with our strategic alignment with Sompo International Holdings has enabled us to construct an improved portfolio year over year with higher return expectations and a lower risk profile.”
The company’s profits also fell as a result of catastrophe losses related to Hurricane Irma because claim settlements and related loss adjustment expenses were greater than originally expected.
Its combined ratio for the quarter was 98 percent compared with 56.5 percent in the same period a year ago. It said the deterioration in the current periods' combined ratio was driven by significantly higher loss and loss adjustment expense ratios.
The current quarter's loss and loss adjustment expenses of $4.5 million compared unfavourably to the $1.8 million reported a year ago, stemming from an increase in estimated losses related to Hurricane Irma which made landfall in Florida in September 2017.
Reinsurance acquisition costs for the current quarter were $1.9 million compared to $2.7 million a year ago, reflecting lower premium earnings and profit commissions. General and administrative expenses for the current quarter were $1.1 million compared to $1.3 million a year ago due to lower performance fees in the current quarter.
Blue Capital re, Q1 2018, profits, fall, catastrophes