Reinsurance growth helps Global Indemnity return to black

Specialty property and casualty re/insurer Global Indemnity returned to the black in 2019, posting net income of $70 million for the year, versus a net loss of $56.7 million in 2018.

Performance was helped by a 18.9% increase in net written premiums, which totalled $562.1 million for the twelve-month period. Notably, this included an 83.8% increase in net written premiums for the company’s reinsurance segment, which came to $88.3 million, up from $48.0 million in the previous year.

Global Indemnity said the growth in reinsurance premiums was mainly due to entering a new casualty treaty during 2019 and rate increases within the property catastrophe line of business. Looking at other segments, net premiums grew by 14.1% for commercial specialty due to new programs and increases in excess & surplus lines submissions, and by 6.0% for farm, ranch, & stable due to an increase in pricing as well as new agent appointments.

In specialty property, net written premiums increased by 10.4% but gross written premiums were down by 3.9% due to a continued reductions of catastrophe exposed business, which has meant fewer premiums were ceded to reinsurers. Global Indemnity recorded a combined ratio of 92.2% in 2019, consisting of a loss ratio of 52.5% and an expense ratio of 39.7%. This compares with a combined ratio of 112.3% in the previous year, consisting of a 71.5% loss ratio and a 40.8% expense ratio.

The property loss ratio improved by 26.1 points to 59.5% in 2019 from 85.6% in 2018 primarily due to lower claims frequency and severity in US insurance, as well as improvements in the loss ratio on property treaties within the reinsurance segment.

The casualty loss ratio, meanwhile, improved by 2.2 points to 57.0% in 2019 compared to 59.2% in 2018, primarily due to lower claims frequency and severity in the US. Additionally, the 2019 results benefited from a $32.8 million favorable loss development mainly from the US insurance operations.

Source: Reinsurance News

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