Catastrophes push nine-month combined ratio to 111%

Third party capital for Hardy

Lloyd’s insurer Hardy has obtained further third-party capital to support growth in its book in 2012.

Bahrain-based reinsurer Arig, which provided 7.5% of Hardy’s 2011 capacity, will increase its participation to 10% for 2012. In addition, US property/casualty insurer Tower Group will provide 15% of Hardy’s 2012 capacity.

Hardy will receive profit commissions from these third-party participations, which it says will enhance return on equity.

“The 2012 business plan envisages premium growth in existing market sectors as well as the introduction of the offshore energy account which will be underwritten by Paul Dawson and his team,” the company said in its third-quarter interim management statement.

Dawson joined Hardy in May from rival Lloyd’s insurer Beazley to develop Hardy’s energy account.

Hardy reported a combined ratio of 111% for the first nine months of 2011 of which it attributed 33 percentage points to major catastrophe events.

 Based on the current position, Hardy’s expectations for the full year results remain unchanged, but the company added that there is continued uncertainty regarding the New Zealand and Japan earthquake losses and the amount of claims arising from the recent flooding in Thailand.

The company said it was too soon to estimate losses from the Thailand floods.

“Natural catastrophe activity has continued to dominate results but the underlying business is extremely strong,” said Hardy chairman David Mann in a statement. “Hardy’s keen focus on specialist areas means it is well-positioned to take advantage of improvements in the rating environment and we anticipate further growth during 2012.”

Gross written premiums increased by 8.5% to £278.1m (9M 2010: £256.3m), and the company has achieved renewal rate rises of 3.9% in the year to day across its book.