31 October 2017Insurance

Blue Capital combined ratio jumps to 455.7% in Q3

Bermuda-based Blue Capital Reinsurance Holdings reported a combined ratio of 455.7 percent for the third quarter of 2017, a significant deterioration compared to the 63.5 percent recorded in the same period a year ago.

The deterioration in the third quarter's combined ratio was driven by significantly higher loss and loss adjustment expense ratios, according to an Oct. 30 statement. The current quarter's loss and loss adjustment expenses of $68.1 million compared unfavourably to the $2.6 million reported a year ago, reflecting the losses related to Hurricanes Harvey, Irma, and Maria and, to a lesser extent, the two September earthquakes in Mexico, the company explained.

Blue Capital Reinsurance Holdings offers collateralized reinsurance in the property catastrophe market and invests in various insurance-linked securities through its operating subsidiaries.

"The financial impact to the insurance industry from the third quarter catastrophe events is estimated to collectively be above $100 billion and these catastrophe events had a meaningful impact on our results,” CEO Michael McGuire, commented.

“Due to our strong risk management practices, active portfolio management and the leveraging of our partnership with Sompo International our losses from these catastrophe events were within our risk thresholds and our overall portfolio performed as expected given the magnitude of these events. Looking forward, we expect market pricing to improve during upcoming renewals and we have positioned the Company appropriately in recognition of the changed market conditions."

The company recorded a net loss of $51.9 million for the third quarter of 2017 compared to a net income of $3.3 million in the same period a year ago.

Reinsurance premiums written for the third quarter were $10.3 million an increase of $2.5 million over the same period a year ago.

The current quarter's reinsurance premium increase was predominantly driven by higher reinstatement premiums recorded in association with the significant catastrophe losses that occurred in the period, according to the statement.

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More on this story

19 October 2017   Bermuda-based Blue Capital Reinsurance Holdings said that it expects third-quarter catastrophe losses of $57.5 million, net of reinsurance and reinstatement premiums.
Alternative Risk Transfer
1 May 2018   Business written by Blue Capital Reinsurance Holdings decreased by almost a third in the first quarter of 2018 compared with the same period a year before, despite positive rate increases.
11 May 2018   Shareholders representing 39 percent of the equity have voted against the continuation of the Blue Capital Alternative Income Fund at the annual general meeting and the company’s board is recommending an orderly run-off of the company.