Sompo International suffers dip in underwriting income
Inflation and natural catastrophes cut into Sompo International’s first half underwriting income, the Bermuda-based re/insurer reported.
The company, the foreign insurance arm of Japanese insurance giant Sompo, said underwriting income for the fiscal first half through end-September slid 5.8% from the prior year.
In Sompo International’s commercial business, net losses and loss expense cost an added $77 million, including an $89 million increase in nat cat losses.
Intelligent Insurer reported that inflation added $48 million to cost lines and acquisition costs rose disproportionately on changes in the business mix, management indicated.
That more than offset the $65 million boost from rising rates in North America and global markets.
Commercial segment net premium earned rose by 15% in North America and nearly 5% in Global Markets, but was down 15% at North American agriculture unit AgriSompo and 1.3% in reinsurance, the largest Sompo International commercial line.
AgriSompo’s combined ratio rose 11.5 points from the prior year period to a technical loss at 101.8%.
Combined ratios were also up in Global Markets to the tune of 7.5 percentage points to 96.1% and by 1.9 points in reinsurance to 90.3%, management indicated. Only North America posted a margin improvement against the prior year.
Sompo International's consumer segment made up for about 86% of the reduction in underwriting suffered by commercial.
Top line gains in Turkey and Asia were credited with adding $109 million to the NPE tally ahead of the reduction of business in Brazil following a unit sale.
The consumer segment managed to take a notable 20 percentage points off of its combined ratio on a turnaround in Turkey to bring the segment back to a light technical profit.
For the larger group, including Japanese operations, infant nursing operations and asset management, net profits, measured in Japanese Yen for the group as a whole, were 2.6 times the prior year period on FX gains on Sompo International profits plus improved domestic earnings.