Property and casualty insurer ProSight Global has posted record net income of $17.6 million during the second quarter of 2020, helped by strong investment returns.
Income compared with $8.62 million for the same period in 2019, while investment income was $23.8 million this year versus $17.4 million previously.
Combined ratio was record 99.6% compared to 98.1% for the second quarter of 2019, representing the tenth consecutive quarter of underwriting profit at ProSight.
Underwriting income was $0.7 million for Q2 2020 compared to $3.8 million for the second quarter of 2019, with the decrease owing to reduced earned premium and bad debt expense due to COVID-19.
Gross written premiums for ProSight’s customer segments decreased in line with expectations by 19.9% to $184.2 million compared to Q2 last year, due to the impact of COVID-19 on several of the company’s niches.
“This was a strong quarter,” said ProSight CEO & President Larry Hannon. “We produced an underwriting profit, generated a double-digit ROE, achieved a new milestone in book value per share, closed on a new credit facility which will refinance our debt on attractive terms, and made progress on several initiatives that we expect will accelerate our growth and profitability in 2021.”
“Our rate execution was excellent in the quarter and the trend has continued into the third quarter,” he continued.
“Our underwriting, risk selection and expense management allowed us to remain solidly profitable and grow our book value per share. We are executing well and expect to have a solid second half of the year with an improvement in our gross written premium versus the second quarter.”
Looking ahead, ProSight is forecasting a 5-10% decline in gross written premiums in 2020 and a 0 to 1.5-point increase in its net loss ratio due to COVID-19 related claims and expenses.
In terms of net investment income, the firm expects its fixed income portfolio, excluding limited partnerships, to yield approximately 3% for 2020, consistent with the 3% it communicated at the end of the first quarter.
However, investment income volatility for the remainder of 2020 remains possible from its limited partnership investments.
