Higher claims bill cuts personal lines profit to $24m
Chartis made an operating profit of $1.1bn (£711m) in 2011 after making a loss of the same size in 2010.
The AIG-owned non-life insurer’s 2010 profit was hit by a $4.2bn reserve strengthening charge for liability business.
Chartis’s combined ratio was still loss making in 2011 at 109%, but an improvement on the 116.8% it reported in 2010. Natural catastrophe losses added 9.2 points to the 2011 combined ratio. The $4.2bn reserve strengthening added 13.2 points to the 2010 combined ratio.
The improved result comes as Chartis revealed it is considering cutting up to 130 jobs in its UK division.
Despite the overall improvement, Chartis’s personal lines profit dropped sharply to $24m (2010: $403m). The main cause was a $2.1bn jump in claims paid to $8.8bn resulting in an underwriting loss of $330m (2010: profit of $102m).
Profit in the commercial lines division on the other hand, surged to $744m in 2011 (2010: $67m) on the back of lower claims and increased net written premiums.
Chartis’s 2011 net written premiums increased 10% to $34.8bn (2010: $31.6bn). Personal lines NWP increased 21% to $13.3bn (2010: $11.1bn). Commercial lines NWP increased 5% to $21.5bn (2010: $20.5bn).
UK business made up 7% of AIG’s overall direct written premium in 2011.
Chartis 2011 results in $m (compared with 2010)
- Net written premiums: 34,840 (31,612)
- Commercial NWP: 21,469 (20,466)
- Personal NWP: 13,341 (11,056)
- Operating profit: +1,116 (-1,068)
- Commercial operating profit: +744 (+67)
- Personal operating profit: +24 (+403)
- Combined ratio: 109% (116.8%)