Specialty property and casualty (P&C) re/insurance provider Sompo International has reported that its underwriting profits increased by 57% to $367 million for the first half of the 2022 fiscal year.
As a result, its revised forecasts for the full-year are now up 43% to $610 million compared with 2021, including the impact of Hurricane Ian.
The increase in earnings helped to offset a net loss of ¥20.0 billion at parent company Sompo Holdings, which was held down by a decrease in earnings for domestic business Sompo Japan.
Sompo attributed the improved performance in its international operations to “steady top-line growth” as net premiums written increased by 28.4% to $5,918 million, mainly due to rate increase and increased retention within crop insurance.
For the full year, forecasts have now been revised upwards by 6% to $8,993 million, led by casualty reinsurance line and crop insurance.
Breaking net premiums written down by business segment, insurance excluding crop was up 10.8% to $1,557 million for H1, while premiums increased by 16.1% to $3,061 million for reinsurance, and by a huge 124.0% to $1,271 for agricultural lines.
Sompo International’s combined ratio for H1 also improved by 2.4 percentage points to 90.3%, again due to top-line growth, with the full-year forecast now revised to 92.8%, include 4.6 points from the impact of Hurricane Ian.
The H1 figure included an insurance combined ratio of 88.9%, a reinsurance ratio of 88.5% and an AgriSompo ratio of 90.2%. The loss ratio for these segments was 66.8%, 58.6% and 82.5%, respectively.
The company noted that its insurance and reinsurance figures benefitted from improved pricing and a decrease in natural disasters during the H1 fiscal period.
Forecast net incurred losses related to overseas natural disasters for the full-year 2022 period are $611 million, including an approximate $385 million from Hurricane Ian.
While the size of the overall loss by natural disasters is roughly equivalent for 2022 and previous heavy loss years, Sompo notes that the loss ratio impact is approximately one-third the size in 2022, due to managing catastrophe exposures while creating greater geographic and product diversification within the expanding global portfolio.
Sompo International’s investment income for H1 2022 remained flat against the prior year period as lower alternative income this year was offset by increased net interest and dividend income on a larger investment base.
