HDU Hardy Under. Bm

TIDMHDU

RNS Number : 2283L

Hardy Underwriting Bermuda Ld

28 July 2011

 
 Date:              28 July 2011 
 On behalf of:      Hardy Underwriting Bermuda Limited ("Hardy" 
                     or the "Company") 
 Embargoed until:   0700hrs 
 

Hardy Underwriting Bermuda Limited

! Trading Update

Hardy Underwriting Bermuda Limited (LSE: HDU), the specialist insurer and reinsurer, today provides an update regarding the level of claims from natural catastrophe events in 2011 and the outlook for the year.

Based on information available as at 18 May 2011, the date of the Interim Management Statement, Hardy's Q1 net loss estimate for the Australian floods, Cyclone Yasi, the New Zealand quake and the Japanese quake was in the range GBP21m to GBP26m. Following the recent receipt of updated loss information from ceding companies there has been a deterioration in the level of market loss from both Japan and New Zealand and the revised estimate for Q1 catastrophe losses, after all reinsurance recoveries, has increased to a range of GBP28m to GBP33m. In addition, the series of tornados in the US in Q2 has resulted in GBP3m of net claims.

We are seeing significant rate increases on the property treaty and the direct and facultative property portfolios, although the rating environment continues to be challenging in the non-catastrophe exposed lines. The table below shows the comparison of 2010 with 2011 written premium, gross of commission, incepting between 1 January and 1 July and an indication of the rate change.

 
                        2010    2011    Change   Renewal 
                         GBPm    GBPm    GBPm     rate change 
 Marine & Aviation      41.1    47.0    5.9      -0.3% 
 Non-marine property    49.3    61.4    12.1     4.5% 
 Specialty Lines        44.8    38.2    (6.6)    -0.9% 
 Property Treaty        93.8    98.1    4.3      7.8% 
 Total                  228.9   244.7   15.7     4.1% 
 

(All figures are at Q4 2010 rates of exchange (USD1.57 CAD1.56 EUR1.17 JPY126.98) and are gross of commissions)

Going into 2011 we made significant adjustments to our property treaty portfolio and the reinsurance programme, and these have had a material, beneficial effect. In May 2011 the Board concluded that it was appropriate to lower the risk tolerance for the remainder of the year, which has resulted in the purchase of further reinsurance prior to the Atlantic hurricane season, in addition to the proportional protections which continue to provide extensive sideways protection.

Following the appointment of Patrick Gage as Director of Underwriting in May 2011, there have been further changes made to the overall portfolio. The additional reinsurances purchased, along with adjustments to underwriting have lowered the potential downside for the account for the remainder of 2011. Other changes to the portfolio have also been made in order to enhance the return on capital. We are of the view that the core of the book should be in the higher margin business, underwritten where we are able to add genuine value through expertise as well as service to brokers and clients. The new energy account for 2012 is in accordance with this strategy. Hardy has cut back on certain scheme business, including the facility driven high net worth home owners book which will not be renewed.

Any forecasts for the full year result will be dependent on the level of catastrophe activity, notably in the Atlantic hurricane season. In the absence of a significant loss event, however, we would expect the full year combined ratio to be approximately 100% whilst maintaining the normal prudent reserving policy.

Hardy will report its interim results for the six months ended 30 June 2011 on 25 August 2011.

For further enquiries, please contact:

 
 Hardy Underwriting Bermuda Limited        www.hardygroup.co.uk 
 Barbara Merry, Chief Executive            Tel: (020) 7626 0382 
 Jamie MacDiarmid, Finance Director 
  Patrick Gage, Director of Underwriting 
 
 Redleaf Polhill                           Tel: 020 7566 6720 
 Emma Kane/Samantha Robbins/Henry          hardy@redleafpolhill.com 
  Columbine 
 

Notes to Editors:

-- Hardy is a specialist underwriting business operating within Lloyd's of London.

-- Hardy has consistently out-performed the Lloyd's market since 1975 over a number of underwriting cycles. It underwrites across most of the major classes of commercial insurance and reinsurance business except motor.

-- Further information on Hardy is available at the Group's website: www.hardygroup.bm

This information is provided by RNS

The company news service from the London Stock Exchange

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