Hannover Re’s Bermuda office focuses exclusively on property-


catastrophe excess-of-loss business and supporting key clients of the Hannover Re group with this type of capacity when it is needed. Looking to the year ahead, Konrad Rentrup, chief executive of Hannover Re Bermuda, says his company will continue to support the established relationships which the company already has in place, through the use of its catastrophe capacity. “We will also use it to build new ones,” he says.


HISCOX


Gross premiums written


Net premiums written


Net income


2011 2,275


1,843 33.4


Combined ratio 99.5 (Claims ratio: 60.2%, Expense ratio: 39.1%)


Return on average common equity


FX 1.7% £1/$1.546-1.57 In terms of growth, Hiscox chief executive Charles Dupplin says that


the Bermudan market is healthy. He says the potential in the market is restricted only by how much capital a company has available.


“We need to grow our capital base through retained profits and we are


attempting to do that,” he says. “Capital is also extremely important in terms of having a good rating. We are an A-rated company and this is what we feel is the best balance between the strength of security for customers, and the ability for us to earn good return on equity (ROE) for our shareholders.”


2010 2,215


1,749 276


89.3% (Claims ratio: 50.1%, Expense ratio: 39.7%),


16.5%


2009 2,254


1,817 440


86.0% (Claims ratio: 41.8%, Expense ratio: 40.4%)


30.1%


LANCASHIRE GROUP 2011


Gross premiums written


Net premiums written


Net income 632.3 565.1 212.2


Combined ratio 63.7% (Claims ratio: 31.7%, Expense ratio: 32%)


Return on average common equity


13.4%


2010 689.1


649.9 330.8


54.4% (Claims ratio: 27%, Expense ratio: 27.4%)


23.3%


2009 627.8


577.1 385.4


44.6% (Claims ratio: 16.6%, Expense ratio: 28%)


26.5% The key issue all management teams should focus on is return on equity


for investors. That is the straightforward view of Neil McConachie, president of Lancashire Insurance Group, when asked about his 2012 strategy.


“ROE is the only thing that really matters, and that is why people invest


in us,” he says. “This means that any decision that we make, at any time, has to answer the question of whether it is going to improve the ROE. For 2012, we think that best way to get a ROE is to focus on a couple of pockets of opportunity where prices are improving, along with being cautious about every other area.”


According to McConachie, Lancashire is looking to expand its presence in retrocessional coverage while taking a cautious view on capital.


Spring 2012 | INTELLIGENT INSURER | 21 Dupplin also believes that companies in Bermuda, such as Hiscox, are


increasingly looking more to the international markets to find new business. Historically, most of their business has been generated from the US.


“Bermuda is quite centred on the US at the moment, and it doesn’t use


up much capital if you can find properly priced business in other parts of the world. In my three or so years here, I have seen an increase in the amount of international business which is coming to the Bermuda market,” he says.


“We are an A-rated company and this is


what we feel is the best balance between the strength of security for customers, and the


ability for us to earn good return on equity (ROE) for our shareholders.”


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