Houston-based HCC Insurance Holdings Inc. reported that despite widespread catastrophe losses internationally and domestically during the second quarter of 2011 the company’s financial results for both the second quarter and first half of the year were “solid.”
HCC Chief Executive Officer John N. Molbeck Jr. said the company is “pleased with our underwriting results despite another heavy quarter of catastrophes for the entire industry. HCC delivered another solid quarter with strong overall underwriting profitability, excluding the impact of catastrophe losses, at or ahead of our expectations. And although worldwide industry catastrophe losses continue to be significant, HCC’s after-tax losses for all such events in 2011 represent 1.4 percent of our shareholders’ equity at Dec. 31, 2010, which is within both our expectations and our reinsurance programs.”
HCC’s net earnings were $69.5 million for the second quarter of 2011 compared to $83.4 million for the second quarter of 2010.
Net earnings were $116.5 million for the first six months of 2011 compared to $154.7 million for the same period of 2010.
The 2011 results include previously announced pretax net catastrophe losses of $21.9 million and $73.3 million for the second quarter and first six months of 2011, respectively, related to the 2011 catastrophes in Japan, New Zealand and the United States.
These catastrophe losses added 3.9 and 6.6 percentage points to the HCC’S GAAP loss ratio for the second quarter and first six months of 2011, respectively, and 4.1 and 6.9 percentage points to its GAAP combined ratio for those same periods in 2011.
HCC had net adverse loss development of $13.3 million in the second quarter of 2011, compared to net favorable development of $2.8 million in the same quarter of 2010, and net adverse development of $22.3 million for the first six months of 2011, versus $2.2 million in the same period of 2010.
The company’s current accident year net loss ratio was 63.9 percent and its accident year combined ratio was 89.8 percent for the first six months of 2011.
Second quarter highlights include:
- The GAAP combined ratio was 89.2 percent for the second quarter of 2011 compared to 84.3 percent for the second quarter of 2010.
- Gross written premium increased 7 percent to $742.1 million for the second quarter of 2011 compared to $691.6 million for the second quarter of 2010.
- Net written premium increased 12 percent to $609.9 million for the second quarter of 2011 versus $546.8 million for the same quarter of 2010.
- Net earned premium increased 4 percent to $524.3 million for the second quarter of 2011 compared to $506.4 million for the same quarter of 2010.
Half-year highlights include:
- The GAAP combined ratio was 91.9 percent for the first half of 2011 versus 87.1 percent for the same period of 2010.
- Gross written premium increased 6 percent to $1.4 billion for the first six months of 2011 compared to $1.3 billion for the same period of 2010.
- Net written premium increased 10 percent to $1.1 billion for the first half of 2011 versus $1.0 billion for the same period of 2010.
- Net earned premium was $1.0 billion for the first six months of 2011, representing a slight increase compared to the same period of 2010.
Source: HCC Insurance Holdings Inc.
Topics Catastrophe Profit Loss
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