Bermuda
“In the retrocession area we have seen an awful lot of losses outside the US
this year,” he says. “A lot of companies have lost quite a lot of money and lost their nerve, outside of the US. This means that they are either pulling out altogether, or looking to buy more cover to reduce their risk levels.
“It has been proven to a lot of companies that their risk levels were too
high. So we are doing what Lancashire does: when everyone else is pulling out, we like to jump in to take advantage of high price rises. Then we will gradually back out again as price rises fade away.”
MONTPELLIER RE 2011
Gross premiums written
Net premiums written
Net income 725.5 624 -115.2
Combined ratio 131.1% (Claims ratio: 98.3%, Expense ratio: 32.8%)
Return on average common equity
-10.5%
While some companies wish to grow and expand geographically as fast
as they possibly can, some, such as Montpellier Re, know where their strengths lie and are happy to remain concentrated on those.
“There is a business model, that we call the ‘perfect pie-chart company’,
which aims to diversify by offering multiple product lines, in all jurisdictions—some as insurance, and some as reinsurance,” says William Pollett, chief corporate development and strategy officer, treasurer and senior vice president at Montpellier Re.
“That is not our business model, because we prefer to pick our spots, and
to specialise in areas where we feel that we have the expertise, critical mass and a competitive advantage.
2010 720
668.8 212
82% (Claims ratio: 48.3%, Expense ratio: 33.7%)
10%
2009 634.9
602.2 463.5
62.2% (Claims ratio: 24.2%, Expense ratio: 38%)
17.3% “Having said that, we are an underwriting company and we are always
looking for new underwriting opportunities. We are opportunistic. For example, in our early days we wrote a fair number of speciality lines, including casualty, comp cat, medical malpractice and terrorism. We wrote this for a time, but withdrew starting from 2004 when rates started to fall below our target returns as a result of stiff competition,” says Pollett.
“We would like to write more of that type of business again, but only
when we get properly rewarded for exposing our shareholders’ capital. We do not strive to diversify for the sake of diversification and, indeed, 2011 again taught the industry that diversification does not necessarily result in lower volatility. On the contrary, it often results in more complexity and increased risk. We call that ‘di-worse-ification’.”
PARTNERRE 2011
Gross premiums written
Net premiums written
Net income 4,633 4,486 -520
Combined ratio 125.4% (Claims ratio: 96.7%, Expense ratio: 28.7%)
Return on average common equity
-9.0%
2010 4,885
4,705 853
95.0% (Claims ratio: 65.9%, Expense ratio: 29.1%)
12.4%
2009 4,001
3,949 1,537
81.8% (Claims ratio: 52.7%, Expense ratio: 29.1%)
37.4% Despite reporting a net loss of just over half a billion dollars for 2011,
PartnerRe is still in a good condition to deal with the challenges and opportunities presented by 2012. This is the opinion of the company’s chief executive and president, Costas Miranthis, commenting on the reinsurer’s full year results.
“Based on our January 1 renewals, we see positive indications of
rate stability or increases in most lines of business, with significant price increases in loss-affected areas,” he says. “There remain however, big variations by line. We expect these trends to continue for the rest
22 | INTELLIGENT INSURER | Spring 2012
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