Bermuda


cat business and should have pushed prices up, including in international areas which have not been affected by losses.


Another concern for Papadopoulo was the pricing of casualty business


where low interest rates have made long-tail casualty business a lot less attractive. However, to counter this Arch Re has been pricing casualty business based on current interest rates, rather than taking a long-term view that interest rates will revert to more normal levels going forward, he said. But he also noted that Arch Re’s casualty portfolio had shrunk in response to persistent soft rates.


ASPEN GROUP 2011


Gross premiums written


Net premiums written


Net income 2,207.8 1,929.1 -105.8


Combined ratio 115.6% (Claims ratio: 82.4%, Expense ratio: 33.2%)


Return on average common equity


-5.3%


years to come. Therefore, if the market wants to offer its investors some hope of attractive returns on equity, it will need to push underwriting and price a lot harder.”


AXIS CAPITAL 2011


Gross premiums written


Net premiums written


Net income 2010 2,076.8 1,891.1 312.7


96.7% (Claims ratio: 65.8%, Expense ratio: 30.9%)


2010: 11.2% 2009 2,067.1 1,836.8 473.9


84.1% (Claims ratio: 52%, Expense ratio: 32.1%)


18.4% Based on the January 2012 renewals, it seems a ‘classic’ hard market


has yet to materialise. While rates were on average up 4 percent across the Aspen group’s entire book of business, this is not enough to indicate a definitive hardening in the market. These are the opinions of James Few, president of Aspen Re.


“It’s not yet possible to simply ‘name our price’, but for most US and Asian catastrophe exposures, we can expect to be paid properly for the risks we want to take,” he says.


“For different reasons, a similar phenomenon exists in many lines of


business affected by credit risk, financial risk, political risk and related forms of uncertainty. Conditions are such that lines including surety, trade credit and financial institutions are well placed for a rate upturn, with the degree and speed of turn depending on whether the business is primary or reinsurance.


“The market in general has finally woken up to the fact that the investment contribution to earnings is going to be quite muted for some


“It’s not yet possible to simply ‘name our price’, but for most US and Asian catastrophe exposures, we can expect to be paid properly for the risks we want to take.”


18 | INTELLIGENT INSURER | Spring 2012 4,096 3,419.4 9.4


Combined ratio 112.3% (Claims ratio: 80.7%, Expense ratio: 31.6%)


Return on average common equity


0.2%


2010 3,750.5 3,147.5 819.8


88.7% (Claims ratio: 56.9%, Expense ratio: 31.8%)


16.2%


2009 3,587.3 2,816.4 461


79.3% (Claims ratio: 51%, Expense ratio: 28.3%)


10.3% “A company should always be looking to grow, but always with the clear


goal of achieving better profits.” This is the mantra of William Fischer, chief executive of Axis Re, a subsidiary of Axis Capital.


“We have targets for returns on equity which are balanced with the


risks we take,” he says. “We are always looking for profitable business and always looking for ways to leverage the capital which we are putting at risk, such as by having a diverse portfolio.”


One area the company has invested in over the last two years is its accident and health division.


“As an organisation, we have invested a significant amount in infrastructure—primarily staff—with the ultimate goal of building a world-class insurance and reinsurance operation in the accident and health space,” Fischer says. “As in many cases, the reinsurance space is proving more profitable.”


CATLIN


Gross premiums written


Net premiums written


Net income


2011 4,513


3,835 38


Combined ratio 102.6% (Claims ratio: 70%, Expense ratio: 32.6%)


Return on average common equity


1.3%


2010 4,069


3,318 337


89.8% (Claims ratio: 57.5%, Expense ratio: 32.3%)


12.5%


2009 3,715


3,168 509


89.1% (Claims ratio: 57.6%, Expense ratio: 31.5%)


24.3%


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