Watford claws its way to profitability in 2019

12-02-2020

Watford Holdings managed to claw its way back to profitability in 2019, despite suffering losses in Q4, with its CEO upbeat about the business’ prospects going forward. 

Watford generated net profit of 44.7 million for the full year in 2019, turning around a $54.5 million loss for the previous year. 

For Q4 Watford made a loss of $16.9 million, though this represented a significant improvement on the $95.2 million loss suffered in Q4 2018.

Gross written premiums edged by 2.7 percent to $754.9 million for the full year, but fell 2.9 percent year on year to $156.2 million in Q4.  Its adjusted combined ratio was 107.3 percent for 2019, up from 103.3 percent in 2018. For Q4 its adjusted combined ratio 126.4 percent, up from 114.2 percent.

John Rathgeber, Watford’s CEO, reiterated its Q4 performance had been negatively impacted by prior year loss reserve strengthening of $24 million and current accident year loss reserve strengthening of approximately $4 million. 

“While painful in the short term, this was the prudent and responsible course of action based on the level of ceding company reported losses compared to actuarial projections,” he said. “Our response to the data was decisive and we feel confident about the overall level of our net loss reserves, which stand at $1.1 billion.”

Rathgeber expressed confidence in the business going into 2020. “As we enter the new year, we are optimistic about the prospects for further book value growth due to the overall positive insurance rate environment, the composition of our in-force insurance and reinsurance portfolio, the strength of our balance sheet, the earnings power of our fixed-income investment portfolio, and the potential material accretive benefit of our new share repurchase program,” he said. 

 

Watford Holdings, John Rathgeber, Results

Bermuda Re