Blue Capital Re reports $52 million Q3 2017 loss

Blue Capital Reinsurance Holdings has reported a net loss of $51.9 million for the third quarter of 2017 a fall of 28.6 percent from the profit of $3.3 million it made in the same quarter of 2016.

The company also reported that it had made a net loss of $43.2 million for the nine months ended September 30, 2017, again down from the profit of $10.3 million it made for the same period of the previous year.

Reinsurance premiums written for the current quarter and year-to-date were $10.3 million and $39.4 million, increasing by $2.5 million and $4.9 million over the same periods a year ago. The current quarter's reinsurance premium increase was predominantly driven by increased reinstatement premiums recorded in association with the significant catastrophe losses that occurred in the period.

The combined ratios for the third quarter of 2017 and year-to-date were 455.7 percent and 228.7 percent compared to 63.5 percent and 66.4 percent in the same periods a year ago. The deterioration in the current periods' combined ratios were driven by significantly higher loss and loss adjustment expense ratios.

The company stated that the current quarter's loss and loss adjustment expenses of $68.1 million compared unfavourably to the $2.6 million reported a year ago, reflecting the losses related to Hurricanes Harvey, Irma, and Maria and to a lesser extent the two September earthquakes in Mexico, partially offset by $5.0 million of ILW recoveries.

Reinsurance acquisition costs for the current quarter were $1.6 million compared to $2.9 million a year ago, as the current quarter included a reversal of profit commissions accrued on quota share business, driven by the reduced profitability. General and administrative expenses for the current quarter of $1.3 million were modestly higher than a year ago.

“The financial impact to the insurance industry from the third quarter catastrophe events is estimated to collectively be above $100 billion and these catastrophe events had a meaningful impact on our results,” said Michael J. McGuire, chairman and CEO. “Due to our strong risk management practices, active portfolio management and the leveraging of our partnership with Sompo International our losses from these catastrophe events were within our risk thresholds and our overall portfolio performed as expected given the magnitude of these events. Looking forward, we expect market pricing to improve during upcoming renewals and we have positioned the company appropriately in recognition of the changed market conditions.”