Reinsurer’s 2010 profit dips 15.8%
Transatlantic Re has made a strategic investment in Lloyd’s as a corporate name, it revealed in its fourth-quarter earnings statement.
Corporate names act as third-party capital providers to Lloyd’s syndicates. The company did not disclose the size of the investment or which syndicate(s) it was backing.
Last year Transatlantic was rumoured to be looking at setting up its own Lloyd’s operation to access to the corporation’s global licences. However it was thought the reinsurer found the application process onerous.
Transatlantic’s participation in Lloyd’s follows a series of expansion initiatives throughout 2010. It opened an office in Hamilton, Bermuda; upgraded its Munich office to full branch status and established a new entity in Gibraltar to serve European clients.
Transatlantic made a net profit of $402.2m for the full 2010 year, down 15.8% on the $477.7m it made in 2009.
Net premiums written fell 2.6% to $3.88bn from $3.99bn, and the reinsurer’s combined ratio increased to 98.2% from 93.5%.
Transatlantic attributed the dip in profits mainly to $202m of pre-tax net catastrophe costs.
Based on analysis of preliminary data, Transatlantic expects to incur between $50m and $100m of pre-tax net catastrophe costs in the first quarter of 2011 for damage caused by the flooding and Cyclone Yasi in Australia. This range reflects estimated total
insured losses from these events of $3 billion to $5 billion.