Bermuda-based specialty P&C re/insurer Sompo International Holdings has recorded adjusted profit of $313 million for its fiscal H1 period, bouncing back from a loss of $14 million for the same period last year.
The company reported a marked improvement in profits over the six months ending September 30th, mainly due to the absence of COVID-19 impacts and rate improvements, as well as steady performance in its alternative investments.
Specifically, underwriting income increased by $263 million to $234 million compared with H1 2020, and net investment income increased by $100 million to $178 million.
This resulted in a net income of $267 million for Sompo International, which was well up on the $8 million it reported in H1 last year.
Nevertheless, Sompo International’s adjusted profit forecast for the full fiscal year remains relatively unchanged at $532 million, while the net income forecast has actually been lowered by $62 million to $469 million.
The combined ratio for the H1 period came to 92.8%, made up of a 26.8% expense ratio and a 66.0% loss ratio.
For reinsurance business the sub-total loss ratio decreased from 68% in H1 2020 to 60% this year, with the loss ratio on cat business falling dramatically from 60% to 35%, and the ratio for specialty moving from 79% to 55%.
On the primary insurance side, the sub-total only decreased by 1%, as a moderate fall in the crop insurance ratio was offset by a slight increase for US business.
Looking at gross premiums written, Sompo International reported 34.5% growth to $7.57 billion, causing it to revise its full-year forecast upwards by $1.65 billion for a total of $11.96 billion.
The firm explained that the growth in premiums was driven mainly by rate improvement and growth in crop insurance.
Overall, the improved performance for Sompo International was reflected in the H1 result for parent company Sompo Holdings, which saw its consolidated net income increase from just ¥39.6 billion ($347.5 million) for the six-month period last year, to ¥130.7 billion ($1.15 billion) this year.
This improvement was helped by the overseas performance of Sompo International, as well as by domestic business Sompo Japan, which saw profits rise 23.4% to ¥87.8 billion ($770.4 million) in H1.
Net premiums written by Sompo Holdings also increased by ¥132.9 billion ($1.17 billion) during this period, mainly due to top line growth of Sompo Japan centered in fire and allied lines and other lines as well as top line growth at Sompo International.