And also in the news this week ...
Insurance Australia writes down £95m in UK
Insurance Australia Group wrote down A$150m (£95m) of intangible assets and goodwill at its UK division in the six months to 31 December 2010. The amount included a A$60m charge because of the impact on gross written premiums of exiting broker relationships and poor short- to medium-term profitability. It also included a A$90m impairment charge because remediation actions to return the company to profitability are taking longer than expected.
Berkshire Hathaway posts £1.2bn insurance profit
Berkshire Hathaway’s insurance operations made an underwriting profit of $2bn (£1.2bn) for the full year 2010, up 38% on the $1.5bn they made in 2009. The rise was largely attributed to Berkshire’s primary insurance operations. Motor insurer GEICO’s underwriting profit increased 72% to $1.1bn from $649m, while the ‘other primary’ division’s profit more than tripled to $268m from $84m. However, the two reinsurance divisions saw their underwriting profit slide. General Re’s fell 5% to $452m from $477m, while Berkshire Hathaway Reinsurance’s fell 30% to $176m from $250m.
Chartis makes £2.5bn loss
Chartis, the non-life insurance division of US insurance giant AIG, made a $4bn (£2.5bn) operating loss after tax in the fourth quarter of 2010, following its previously announced $4.2bn reserve hike. Excluding the reserve strengthening, AIG said Chartis’ operating result would have been broadly in line with the £1.8bn loss it made in Q4 2009. The insurer’s combined ratio jumped to 160.5% from 132.5%. AIG attributed 49.2 points of the Q4 2010 combined ratio to the $4.2bn reserve strengthening. For the full year, Chartis made an operating loss of $1.1bn.