Reinsurance News

Sompo Intl. targets 88% CR in new 2023 forecasts

31st May 2022 - Author: Matt Sheehan

Bermuda-based specialty P&C re/insurer Sompo International Holdings is targeting a combined ratio of 88%, as well as growth in profit and premiums, as part of its new forecasts for 2023.

Sompo InternationalThe company recently reported adjusted profit of 61.8 billion yen (USD 483.0 million) for the full-year 2021, up from 31.8 billion yen (USD 248.5 million) last year.

This performance was mainly attributed its growth to the performance of its commercial P&C business unit, which saw underwriting profit increase by 42.9 billion yen over the year, due to rate increases and an absence of COVID-19 losses.

Looking ahead to full-year 2022, Sompo International is forecasting adjusted profit of 100.0 billion yen, 93.5 billion of which will come from Commercial P&C business.

And for 2023, the company expects this figure to increase to 110+ billion yen, rising at a compound annual growth rate of +54.2%, when compared with its 2020 figures.

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Gross written premiums, currently recorded at 12,272 million yen for 2021, are actually already ahead of Sompo International’s original plans for 2023, but are now forecast to grow to 12,861 million yen for the 2022 period.

Sompo International says its premium growth has been supported by organic growth, improved market pricing, bolt on acquisitions and a higher retention of premiums.

In order to reach its 2023 targets, Sompo International plans to address market risks particularly in the US and Europe by tailoring its underwriting approach tailored to meet inflation and loss trend changes.

Such an approach will include re-pricing products annually, lowering the impact on its casualty and professional lines, maintaining prices above inflation trends, and remaining cautious in its property catastrophe exposures.

During this time, the company generally expects favourable market conditions, with prices to remain ahead of loss trends and fast-rising interest rates, which it says should improve yields and positively impact 2023 results.

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