Our reinsurance division, led by Patrick Hartigan, saw strong growth in 2010, writing $174.4m in gross premiums, an increase of 23% on 2009. Our well diversified portfolio mitigated the impact of earthquakes in Chile and New Zealand and we achieved a combined ratio of 90%. Our main focus is on property reinsurance, more than two thirds of which is catastrophe protection for clients that, in many cases, have reinsured with Beazley for much of the company’s 25 year history.
In 2010 we increased our premium capacity through the establishment of a new special purpose syndicate, 6107, supported by additional capital supplied by Lloyd’s Names. This has enabled us to write larger lines for our preferred clients.
Eighteen named storms formed in the north Atlantic but none made landfall in the US. However, the Chilean earthquake that struck at the beginning of the year generated a loss to Beazley, across our reinsurance and property teams, originally estimated at between $55m and $75m, based on a market-wide loss of $5bn to $8bn. The share of this borne by the reinsurance division must wait on the adjustment of claims at the primary level.
The New Zealand loss proved more challenging for the market to quantify and in common with almost all market participants, we have revised our original estimate upward to $35.0m (originally $15m - $30m).
Losses of this kind are of course the raison d’être of a reinsurer. In the aftermath of the Chilean earthquake we took steps to support clients that were under severe financial pressure by advancing funds before their claims were fully adjusted.
We see a broad range of business at the Beazley box at Lloyd’s but in 2008 we also opened an office in Munich to access continental European business that would normally be placed exclusively in the local market. Andreas Bergler and his team moved to a new and larger office in 2010 and the business, sourced from throughout southern Europe, continues to grow and perform well.