Bermuda headquartered Blue Capital Reinsurance Holdings Ltd. fell to a net loss of $6.7 million in the third-quarter of 2018, as price increases achieved through renewals failed to sufficiently offset catastrophe losses.
The Bermuda-based holding company today announced its results for the third-quarter and first nine months of 2018, recorded a net loss of $6.7 million and $3.7 million, respectively.
The reinsurer’s combined ratios for the quarter reached 212.6% and 124.7% for the nine month period, compared with 455.7% and 228.7% for the same periods in 2017, respectively.
The firm notes that in 2017, its combined ratio was impacted by significant losses and loss adjustment expenses related to hurricanes Harvey, Irma, and Maria, and, further loss creep from Irma, combined with losses from typhoon Jebi and hurricane Florence, have impacted to company’s profits in 2018.
The reinsurer announced previously that it expects its Q3 results to be impacted by approximately $10.2 million of nat cat losses, the majority of which coming from Irma loss creep.
Michael McGuire, Chairman and Chief Executive Officer (CEO) of Blue Capital Re, said: “While our 3rd quarter results have been impacted by increased loss estimates related to 2017’s Hurricane Irma and from losses incurred on Hurricane Florence and Typhoon Jebi and other smaller events, the price increases we achieved during this year’s renewals have helped to partially offset these impacts.”
Following the significant level of industry-wide catastrophe losses experienced in 2017, price increases were seen in the reinsurance market, most notably in loss-affected lines and regions. However, the abundance of both traditional and increasingly alternative capital served to dampen price hike when compared with previous large loss years, and rate momentum has faded through the year.
“As we look forward to the January renewals we expect a stabilizing pricing environment and are confident in our ability to continue building an attractive portfolio of business which should enable us to generate value for our shareholders,” added McGuire.
For the third-quarter and the first nine months, the firm recorded reinsurance premiums written of $4.2 million and $24.1 million, respectively, which is a decline of $6.1 million and $15.3 million year-over-year.
Blue Capital Re explains that the lower writings were a result of a reduced capital base, lower reinstatement premiums, and increased cessions to third-party reinsurers.
Regarding hurricane Michael, the reinsurer said it remains too early to provide and accurate loss estimate, but said that it does expect the event to negatively impact its fourth-quarter 2018 results.
