Bermuda-based IPC Holdings, Ltd. joined the growing number of reinsurers celebrating a good third quarter, as the company announced that its net operating income, which excludes net realized gains and losses, was $46.6 million or $0.97 per share, for the quarter ended September 30, 2002, compared to an operating loss of $70.7 million, or $2.82 per share, for the third quarter of 2001.
Net income rose as well during the period to $45.8 million, or $0.95 per share, compared to a net loss of $69 million, or $2.75 per share, last year. For the nine months ended September 30, 2002, net income was $137.9 million, compared to a net loss of $24.2 million for the corresponding period of 2001. As IPC noted later in its bulletin, the figures are to be viewed in light of the extraordinary losses from the WTC attacks in last year’s third quarter.
President and CEO Jim Bryce commented that, “Typically the third quarter is the peak period for catastrophe losses around the globe, and 2002 was no exception. There was significant flooding in eastern and central Europe, together with some floods in France. In addition, there was flooding in Korea and China as a result of typhoons, one of which also struck Japan. Naturally, all major players in the global reinsurance arena would have suffered some losses as a result, and IPC is no exception. Due to our disciplined underwriting approach, particularly in terms of not writing business which we believe is inadequately priced, we avoided any significant losses from Asia, and have incurred only limited losses from the floods in Europe. As a result, our third quarter 2002 results are in line with the record results achieved in the first two quarters of this year.”
He also noted with satisfaction A.M. Best had recently affirmed the company’s A+ (Superior) rating, and that IPC was optimistic about the 2003 renewal season. He further indicated that “in light of the dislocation currently taking place in the European reinsurance marketplace,” the company saw increased opportunities, and explained that this would delay any decision on dividend payments, as it wished to maintain as much capital as possible.
IPC wrote gross premiums of $35.5 million in the third quarter of 2002, an increase of 7.4 percent over the $33.1 million in the third quarter of 2001. “It should be noted that the third quarter 2001 figures contained $17 million of reinstatement premiums arising from the World Trade Center losses,” said the bulletin. “Excluding reinstatement premiums from both periods, gross written premiums would have reflected an increase of 115.7%.”
“Premiums were higher because we used our increased capacity from our capital raising in 2001 to satisfy the increased requirements of our existing clients, and we wrote business for new clients, which more than offset business which we did not renew because of unsatisfactory terms and conditions. In addition, we benefitted from rate increases, generally in the range of 10% to 15% for loss free contracts, with greater increases on loss impacted contracts. This brought our total written premiums for the nine months ended September 30, 2002 to $242.7 million, an increase of 93.1% in comparison to the $125.7 million of premiums written in the first nine months of 2001,” the bulletin continued.
Topics Profit Loss Europe Flood
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