A strong investment result in the fourth-quarter of 2019 more than offset a decline in underwriting income at ProSight Global, Inc., helping the company record an increase in net income from continuing operations to $14.7 million.
The firm’s net income for the quarter improved on the $13.5 million recorded for the fourth-quarter of 2018, while adjusted operating income increased from $15.7 million to $16 million for the three-month period.
The growth in net income during the period was supported by a 37.1% rise in net investment income to $17.4 million, driven by an expansion of the investment portfolio and the improved performance of limited partnerships, says the firm.
Were it not for the higher investment return in the period then ProSight Global’s Q4 net income would have likely declined year-on-year, as underwriting income fell from $9.5 million to $5.7 million. This resulted in a weakening of the combined ratio from 95.1% in Q4 2018 to 97.2% in Q4 2019.
The firm explains that the decline in underwriting income was a result of a higher loss ratio of 61.9%, and also includes a slight reduction in the expense ratio from 36.5% to 35.3% in Q4 2019.
In Q4 2019, ProSight Global has reported that there were no catastrophe losses, which compares with a catastrophe loss bill of $3.6 million in Q4 2018.
For the fourth-quarter, gross written premiums (GWP) including Other jumped by almost 13% in 2019, while GWP from customer segments grew to $249 million. According to ProSight Global, the growth was the most substantial within the Transportation, Real Estate and Consumer Services customer segments.
The company’s Chief Executive Officer (CEO), Larry Hannon, commented: “I would like to thank all of our employees who contributed to our exceptional fourth quarter and full-year results. Coupled with the strong support of our distribution partners, the ProSight team delivered excellent financial results consistent with our high expectations, including strong net income from continuing operations, and record-level annual GWP and adjusted operating income.
“Our success in 2019 is further evidence that our focus on specific niches and ability to deliver differentiated offerings that are valuable to our customers position us to deliver double-digit top line growth, ROE, and increases in book value over the long term. As we enter 2020, I believe we are poised to build upon last year’s achievements and success.”
For the full year 2019, ProSight Global’s net income from continuing operations actually declined slightly to $45.5 million when compared with the previous year. The firm attributes this to an increase in other expenses of more than $16 million, mostly driven by vesting of non-recurring grants of restricted stock units in connection with the IPO, and also costs related to the departure of its former CEO.
As in the fourth-quarter, underwriting income remained profitable but did decline in the year, from $24.4 million in 2018 to $16.4 million in 2019. The full year combined ratio weakened slightly from 96.7% to 98%, and includes a higher loss ratio of 62% and a slightly lower expense ratio of 36%.
For the full year 2019, ProSight Global has announced catastrophe losses of $3 million compared with losses of $3.6 million in 2018.
Net investment income improved by more than 23% for the full year to just under $69 million, again driven by growth of the investment portfolio and the improved performance of limited partnerships.
For the full year 2019, GWP including Other jumped by more than 8% when compared with the previous year, while GWP from customer segments grew to $899.8 million. Again, the growth was the most substantial within the Transportation, Real Estate and Consumer Services customer segments.
