Hardy posts $27m loss
Bermuda-based Hardy Underwriting took a $27.3 million loss in 2011, citing an “extraordinary run of catastrophe losses” last year.
This is compared to a profit of $3.2 million in 2010. The company, which has become an attractive target for potential buyers recently, underwrites risks in niche lines of predominately short tail business
“We have experienced the most extraordinary run of catastrophe losses that the insurance market has ever seen,” said David Mann, chairman of Hardy. “Hardy’s more internationally focused catastrophe portfolio differs from the typical Lloyd’s concentration on the US, however, and has therefore been hit hard in the last 18 months, with significant losses in Australia, New Zealand and Japan. We have also experienced modest losses from the US tornadoes.”
The company reported a combined ratio for 2011 of 119 percent, compared to 102 percent the year before.
Hardy wrote more business in 2011, reporting $266.7 million in gross premium written compared to $248.5 million in 2010.
The company is still uncertain about the overall impact of their 2011 losses, says Mr Mann.
“The scale and complexity of the losses is evidenced by the recent revisions to estimates by reinsureds, which obviously impact Hardy’s own booked reserves,” he said.
“These revisions are ongoing, so there remains an element of uncertainty about eventual outcomes. Hardy’s approach to reserving is, however, unchanged and a robust margin over best estimate reserves continues to be maintained.”
Hardy CEO Barbara Merry stated that the company’s non-cat portfolio performed ahead of expectations and showed a loss ratio of 50 percent. She touted opening their Bermuda office as a point of diversifying their lines of business.
“Hardy’s diversification strategy also extends to the geographic locations in which we now operate,” she said. “Our Bermuda office, which was set up in 2008 following the decision in 2007 to redomicile to Bermuda, is proving itself as a platform to gain greater access to US D&F and property treaty risks.”
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