Goshawk Insurance Holdings warned that results for the six months to 30 June are expected to be below market expectations. According to a report, the company said results had been hit by an increase in its reserves at Syndicate 102.
The insurance and reinsurance underwriter said depending on the extent of additional reserving required, the results could be in breach of its banking covenants, said the report from AFX. It said the Goshawk board were working with the banks to ensure their continued support.
According to a report, preliminary findings of an external actuarial review show that a material increase in reserves is needed for Syndicate 102. The group are thus acting accordingly to strengthen reserves for prior years.
The move is expected to result in a loss for the year, the report continued, although it will leave the group in a stronger position. The strengthening is said to be mainly in respect of contingent cost, legal expense and cargo classes of business.
According to the report, Goshawk added that the trading environment for business now written by Syndicate 102 remains good.
News of the Goshawk reinsurance business, Goshawk Re was more positive, the report went on to say. The Bermuda-based company has kept its reserves within the range of best estimates generated by its external actuarial review.
Goshawk Re's results to 30 June are ahead of expectations, reflecting strong underwriting results and good investment returns, the report said.
Goshawk will publish its interim results on 26 September.
