Sompo International’s profits decreased by $228 million over the 3Q FY2020 period, largely due to the negative impact of COVID-19 on the business’s results.
The Sompo Holdings subsidiary recorded adjusted profit of just $46 million for the period, after sustaining an underwriting loss of $178 million from COVID-19 and natural disasters.
Investments contributed a further loss of $59 million as the pandemic caused continued volatility across the investment markets.
Sompo International’s profit forecast for full-year 2020 is now set at $156 million, which is less than half the $320 million it recorded for the full-year 2019.
However, the business did report substantial top line growth over the 3Q period, with net premiums earned up $673 million to £3.29 billion, compared with $2.62 billion for the 2019 period.
Reinsurance premiums accounted for $1.57 billion of this total with growth of 28%, while primary insurance premiums were up 24% to $1.72 billion.
For the full-year 2020 period, Sompo International is now forecast to record net premiums earned of $4.59 billion, of which $2.39 will be from reinsurance and $2.20 from insurance.
Sompo International’s combined ratio deteriorated 5.2 points in the 3Q period to 99.3% as a 7.9 point increase in the loss ratio was partially offset by a 2.7 point improvement in the expense ratio.
For the full year, the combined ratio is forecast to stand at 97.2%, which would be an increase of 1 point of the 2019 combined ratio of 96.2%.
The loss ratio was 67% for reinsurance business in 3Q FY2020, compared with 59% in the prior year period. This was broken down into 59% in CAT business and 72% in specialty, compared to 38% and 61% previously.
For primary insurance the loss ratio was 77%, made up of 63% in US business and 97% in crop insurance. In 2019, the ratio was 68%, with US and crop business standing at 58% and 86%, respectively.
Looking at the results of Sompo Holdings overall, consolidated net income decreased by 23 billion yen over the 3Q period to 85.7 yen, with the full-year figure forecast at 140.0 billion yen.