CEO Rosenthal dubs performance “disappointing”
Run-off reinsurer Alea made a net loss of $50.1m in the first half of 2010 compared with a loss of $44.7m in the same period last year. The company cited a financial impairment of $50.6m as the main reason for the loss.
“Our financial performance for the first half of the year is disappointing, given the group's considerable progress in continuing its run-off strategy,” wrote Alea chief Jeff Rosenthal in the CEO’s report accompanying the results.
Investment income was also down, dropping nearly 27% to $14.8m in the first half of 2010 from $20.2m in the first half of 2009. “While our investment performance for the first six months of the year has created additional challenges for the group, we continue to successfully execute on our key deliverables while in run-off,” Rosenthal wrote.
He pointed out that insurance contract liabilities decreased 8.2% to $723.2m from $788.2m at year-end 2009. “In addition, we completed a number of commutations on favorable economic terms and continue to closely manage our direct insurance claims in the United States,” Rosenthal said.
Alea also strengthened the reserves supporting its life insurance portfolio by $3.6m in the first half of 2010, and appointed a new life actuary to analyse the reserves. “In the second half of the year, we plan to further audit and inspect our reinsurance policies in this portfolio with the expectation of reducing further uncertainty in the group's life reserves,” Rosenthal said.
Rosenthal took over as CEO of Alea on April 1, following the resignation of previous chief Mark Cloutier. Cloutier was named a non-executive director of Alea on 12 May.