Swiss-based insurer and reinsurer Glacier Group reported a 4% increase in pretax net income to $26 million (18.1 million euros) for the first half of 2009 from $25 million in the same period last year.
Financial highlights:
- Gross written premiums (including reinstatements) of USD 314.1 million (H1 2008: USD 372.0 million). The reduction in premium writings year to date reflects the non-renewal of participation in Glacier’s Lloyd’s vehicle and a planned reduction in North American property exposed business.
- Net income before tax for the six months ended 30 June 2009 of USD 26.0 million, an increase of USD 1.0 million over the prior period (H1 2008: USD 25.0 million). While gross written premium volume declined over the comparable period in 2008 overall profitability has improved.
- The gross combined ratio was 78.6% (H1 2008: 72.8%). After reinsurance this translates into a net combined ratio of 84.8% (H1 2008: 90.2%).
- The investment portfolio generated USD 16.1 million of income (H1 2008: USD 14.1 million) from interest and realized gains. Including net unrealized gains the investment portfolio returned 5% on an annualised basis through the half year. This reflects the Group’s conservative investment strategy and secure investment portfolio.
- Return on equity of 9.9%.
- The Group’s underwriting capital base increased to USD 591.9 million up from USD 557.7 million at the full year, an increase of USD 34.2 million over the previous six months.
- Total investments and cash increased to USD 887.3 million from USD 784.1 million at the full year, an increase of USD 103.2 million from 31 December 2008.
Written premiums for the period reflect a balanced insurance and reinsurance portfolio, with proportional growth in Europe and in Specialty lines. Glacier expects 2010 premium development to show a continuation of this shift towards Specialty lines and Europe. Specialty is forecast to comprise over 65% of the overall portfolio, and within the Property portfolio we expect over 50% of premium to be generated by European cedents.
Operational highlights for 2009 year to date include:
- Glacier Insurance opened a branch office in the centre of Zurich in April 2009, widening its branch network and developing a presence in an increasingly important underwriting centre. The branch is under the leadership of Glacier Insurance CEO Richard Etridge.
- In March 2009, Glacier Insurance London began the development of its UK property portfolio with the appointment of Alex Campbell as Senior Property Underwriter. He has over 20 years of experience in his field and joined Glacier after a successful career at Arch, Allianz and Skandia.
- A.M. Best affirmed the Group’s financial strength as “A- (Excellent)” and issuer credit rating as “a-“ in July 2009. The outlook on all ratings remains stable and A.M. Best commented on Glacier’s excellent risk-adjusted capitalisation, good anticipated underwriting performance and developing business profile.
Robbie Klaus, Chief Executive Officer, Glacier Group commented:
“Glacier has yet again delivered a solid, financial performance and we are particularly pleased with our strong underwriting result. Our focus on developing our growing European platform, particularly in our insurance business, has been a huge success and we have consolidated our position in our chosen markets. With a focus on large commercial and industrial risks, we are well-positioned as an alternative to the larger European and Bermudian players.”
“Our outlook for the full year is positive, and looking forward into 2010 we see significant opportunities to develop additional profitable business in our Specialty markets, particularly in Europe. We see rates improving in most classes of business. In particular, we anticipate significant hardening in aviation rates, following the major industry losses in H1 this year.”
“We continue to attract and retain the best industry talent. Our underwriting team has grown throughout the year and is supported by strengthened actuarial, risk modelling and risk management functions.”
Glenn Campbell, Chief Financial Officer, Glacier Group added:
“A good underwriting result has been boosted by our strong investment return from a portfolio, which consists of cash, short-duration bonds and fixed income investments with a minimum A or equivalent rating and reflects our conservative long-term investment approach and commitment to security. Unlike many of our peers, we remain unscathed by the volatility that global financial markets have experienced during the last 18 months.”
