London-listed insurer Goshawk remains upbeat after posting a £7.4m pre-tax loss for 2001, its chief operating officer told Insurance Times.

Chris Fagan said: "While it's bad news to lose money, it isn't an enormous loss in comparison to our peer group."

This was its first full-year loss since becoming a public company, but Fagan said the rating environment for 2002 and the prospects for its newly created Bermudan reinsurance operation were good.

The company, which operates Syndicate 2021 at Lloyd's, recorded a pre-tax loss of £7.4m in 2001, down from a profit of £2.9m in 2000. There was a 44% rise in gross written premiums to £231.6m from £161.3m. No final dividend was proposed.

Goshawk's combined ratio on continuing operations fell to 107% from 108% in 2000.

Fitch Ratings director David Wharrier said this compared favourably with other insurers such as Wellington, whose combined ratio including the effects of the World Trade Centre attack was 143%.

Fagan put the loss down to factors which included the Petrobras and Air Lanka losses, deterioration on business previously written and the WTC effects, which have now been estimated at £11m net of reinsurance.

Fagan added that Goshawk's 2001 result was reasonably robust because the company's investment returns had been much better than those of other insurers.

Goshawk Re, which started trading from January 2002, is forecast to write about $150m (£105m) this year. This, coupled with the expansion of Goshawk's Lloyd's syndicate capacity to £185m from £150m, has nearly doubled the company's total capacity.

Fagan said Goshawk Re had materially improved Goshawk's business model by giving it an opportunity to write a lot more reinsurance.

"Reinsurance is a much higher margin part of our business. Not only that, but also we can use the capital much more efficiently in Bermuda and it's a lower cost base."