Sompo International has revealed that it expects its full year 2019 adjusted profit to increase by just under 80% to USD 318 million, when compared with the previous year.
Global re/insurance giant Sompo Holdings has released its financial results for the nine month period ended December 31st, 2019, which includes the performance of its overseas operations.
The results show that Sompo International, the firm’s Bermuda-based property and casualty re/insurance arm, experienced an increase in adjusted profit of USD 123 million, or 80% to USD 277 million in the 9M period, when compared with the prior year period.
As a result of the higher adjusted profit secured so far in the financial year, Sompo International forecast that its full year 2019 profit will also increase by 80%, or USD 140 million to USD 318 million, against USD 177 million of adjusted profit announced for 2018.
The re/insurer’s gross premiums written jumped by USD 648 million to USD 5.2 billion in the period, which the firm attributes to improving pricing and also organic growth. For the full year, Sompo International’s gross premiums are expected to increase by USD 720 million to USD 6.9 billion.
Net premiums written and earned increased for the nine month period and are also forecast to improve for the full year 2019, as did underwriting income and investment income.
Sompo International states that other income increased by USD 372 million in the period to USD 223 million, driven mostly by an increase in unrealized gains on securities.
The loss ratio increased for Sompo International in the period by two percentage points to 64.3%, which the firm attributes to lower profitability in the crop insurance sector. In contrast, the firm’s expense ratio fell by more than one percentage point to 29.9%, and the company notes an improved commission ratio and a better company expense ratio.
At 94.1%, Sompo International’s combined ratio actually weakened by one percentage point when compared with the prior year nine month period. For the full year, the company forecasts that its combined ratio will strengthen by more than three percentage points to 96.1%, compared with the 99.4% combined ratio recorded for the full year 2018.