Reinsurance unit boosts growth at Navigators ahead of Hartford takeover
As it readies to be taken over by The Hartford Financial Services in a deal that values it at $2.1 billion, Navigators Group posted a solid set of results and returned to profit in the third quarter of 2018.
Its CEO also noted the performance and growth in its global reinsurance business, which increased its gross written premiums by almost 10 percent. It hopes to drive further growth in its international businesses once the deal with The Hartford is completed.
The company made a net profit of $4.6 million in the third quarter compared with a net loss of $28 million for the same period in 2017 when it was hit by severe catastrophe losses.
Its combined ratio for the period was 105.3 percent compared with 121.9 percent for the same period in 2017. Its gross written premiums increased by 13.4 percent to reach $455.9 million.
The quarter included net losses and loss adjustment expenses of $11.8 million, net of reinsurance reinstatement premiums, from Typhoon Jebi and Hurricane Florence, as well as prior accident year reserve strengthening of $16.5 million primarily within its primary casualty division of its US insurance reporting segment.
In the same quarter in 2017 featured net losses and loss adjustment expenses of $75.1 million, net of reinsurance reinstatement premiums, from Hurricanes Maria, Irma and Harvey and the Puebla, Mexico Earthquake, as well as prior accident year reserve strengthening of $29.5 million primarily within its US and International Insurance reporting segments.
For the nine months, it made a net profit of $67.6 million compared with $13.6 million in the same period a year earlier. Its gross written premiums in the first nine months reached $1.4 billion, increasing 11 percent on the year before.
Stan Galanski, president and chief executive, said: “We are pleased to report continued strong revenue growth in the third quarter, with each of our three reporting segments producing positive premium growth. We benefited from modest rate increases across the majority of our specialty product lines.
“The ongoing strength of the US economy, and particularly the construction segment, also benefited us, providing a strong growth of new business. In a quarter in which the insurance industry experienced significant natural catastrophe activity, our natural catastrophe loss estimates were well within our expectations.
“GlobalRe had another excellent quarter, with 9.4 percent growth in gross written premium and a 93.2 percent combined ratio. Within the US Insurance segment, gross written premium grew 19.2 percent. Underwriting results for the US Insurance segment were adversely impacted by a strengthening of reserves for a portfolio of primary casualty policies on habitational risks that is largely now in runoff.
“Absent that action, the US Insurance business would have been profitable, with continued solid performance in our primary construction liability, excess casualty, environmental, life sciences, marine and management and professional liability products. The International Insurance segment showed improved results over third quarter 2017 and for the first nine months and our team is focused on actions required to improve both the loss ratio and cost structure. Our investment portfolio continued to perform well, with net investment income up 13.5% for the quarter and 11.5% for the first nine months of 2018.”
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