Chief executive hopes aviation and specialist lines will offset catastrophe-exposed markets
Chaucer is to ramp up capacity in its motor book to take advantage of increasing rates. The Lloyd’s insurer predicts that rate increases will outstrip claims inflation, and is launching new products and expanding its distribution lines.
This news comes as Chaucer reported a 23.3% jump in premium income for the nine months to September, compared with the same period last year.
Chief executive Ewen Gilmour remains optimistic for 2010, saying increasing rates in aviation and specialist lines will help offset decreases across catastrophe-exposed international marine and non-marine markets.
He said: “The prospects for 2010 are encouraging. We expect rates to remain satisfactory overall, although rates for catastrophe-exposed risks will come under pressure if there are no major losses in the final weeks of the year.
“We are also encouraged by the continued momentum of our UK motor underwriting and the ability of our underwriting teams. Our new distribution initiatives will take full advantage of the opportunities now arising, particularly in the aviation and specialist lines markets.”
Chaucer struggled in trade credit, as it had to pay claims in developing countries including Bahrain, Kazakhstan and Ukraine. This led to the LSE-listed company needing to strengthen its reserves for trade credit.
The quarter saw the group make further provisions for potential losses in the political risk account of the marine division.
Investment returns also helped brighten up Chaucer’s results compared to last year’s.
Chaucer pulled in £46m, or 3.6% return on investments, for the first nine months of the year compared to a £27.7m loss last year. Most areas performed well apart from cash and deposits, which are locked down by low interest rates.
The Lloyd’s Franchise Performance Directorate has approved a 2010 capacity of £707m for Syndicate 1084, an increase of £73m or 11.5% from the 2009 capacity of £634m.