Bermuda-based IPC Holdings followed an emerging industry pattern with its announcement that gross premiums written in the fourth quarter increased 42.2 percent to $7.389 million and operating income grew at the same rate to $25.8 million, but despite the increases the extraordinary catastrophe losses in 2001 caused an overall loss for the year.
IPC’s yearly figures all rose, but while gross written premiums increased up 41.9 percent from $93.8 million to $133.1 million, and overall net from $118.6 million to $156.2 million, the losses rose by even more from $53.66 million in 2000 to more than $137 million last year, resulting in an overall net loss of $3.933 million, compared to over $44 million in earnings in 2000.
President and CEO Jim Bryce summed it up pretty well, stating that,”Unfortunately, 2001 will go down in everyone’s memories for only tragic reasons. From an insurance industry perspective, there were many catastrophic losses throughout the year, including the worst ever event to date, impacting almost every major line of business.”
Bryce highlighted the unusual nature of last year’s events and observed that, had they not occurred IPC would have had an exceptional year, but in reference to his company’s 111.5 percent loss ratio candidly stated it was that high “because we are in the catastrophe business, and providing financial support to our clients in the aftermath of such tragedies is why they pay us reinsurance premiums.”
IPC’s outlook for 2002 appears brighter. Bryce acknowledged that an additional $546 million in new equity raised last December had already been put to work “in meeting the capacity needs of our clients. IPC should also benefit from its exclusive agency agreement with newly formed Bermuda insurer Allied World Assurance, which was started last year by AIG, Chubb and Goldman Sachs with an initial capitalization of $1.5 billion. The deal “will provide a limited amount of risk-free fee income over the next three years,” Bryce indicated.
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