CNA CEO refocuses Lloyd’s syndicate for international turnaround
CNA Financial Corporation’s CEO Dino Robusto wants to turn around the international business unit by refocusing the Lloyd’s Hardy syndicate.
The underwriting profitability of CNA’s international business deteriorated further in the second quarter of 2018 after the underlying combined ratio of the unit had been around 100 percent for the last six quarters.
The international business unit provides insurance solutions tailored to the needs of international businesses.
The combined ratio in the international business unit deteriorated to 104.7 percent in the second quarter of 2018 from 100.1 percent in the same period of 2017, impacted by large property losses in Canada. The underwriting loss was $11 million after an underwriting profit of $1 million over the period.
But the Canada business is not the main focus for Robusto’s plan to turnaround the unit. As he pointed out in the second quarter earnings call, over the last 10 years the Canada business had a combined ratio under 90 percent. “We had some property losses that were higher than expectations in the quarter,” Robusto admitted, but over the six first months of 2018, the combined ratio was “in-line,” he noted.
It’s in the Lloyd’s operations that Robusto wants to make the bigger changes as loss ratios and the combined ratio there has been disappointing for some time.
Hardy syndicate 382 reported a loss of £34.2 million for 2017 after a loss of £6.8 million in 2016. The combined ratio in 2017 deteriorated to 116.3 percent from 111.2 percent in the previous year.
CNA Hardy specialises in commercial insurance for clients within the Lloyd’s and company markets, writing business across Europe. Via the Lloyd’s platform CNA writes business in more than 200 countries worldwide.
CNA is in the process of shifting products at Hardy from the standard Lloyd's type products, the marine, the shared-in-layered property to focus on target markets where CNA has the expertise such as healthcare, technology, life sciences and certain aspects of the construction business, Robusto said. “That's a process that takes time,” he noted. The refocussing measures also include a shift away from aviation and political risk, Robusto added.
“We had a very unprofitable accident & health (A&H), we had some of our classic cap property which we're moving away from,” Robusto noted. “That's the way we see Lloyd's playing up for us in the future and so we clearly expect more profitability from that,” he added.
“There are efforts clearly in particularly on the Lloyd’s syndicate to make that more profitable and we remain very optimistic about our international operation,” Robusto said.
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