Aspen bolstered reserve by £3.9m in 2010
Some Lloyd’s insurers may have to strengthen reserves in 2011, according to Markel International finance director Andy Davies.
“What you will see this year is that a couple of companies will start to see reserve deterioration creep through,” he told Insurance Times following the release of Markel International’s results. “You started to see them at the half year. There was one notable one in the third quarter. That trend will continue and get bigger, especially for those that write a large casualty account.”
Bermuda-based (re)insurer Aspen Insurance Holdings made a group-wide net reserve increase of $6.2m (£3.9m) in the third quarter of 2010, driven by a $9.5m reserve boost at its insurance subsidiary, arising mainly from its financial and professional lines business.
Markel International, a division of US insurance group Markel Corporation, released $118m (£73m) of reserves over the year to 31 December 2010, up from $108m in 2009.
Davies says Markel International has a conservative reserving approach, and the reserve margins above best estimates remained the same in 2010 as in 2009.
“Some people sugar-coat their results with reserve releases, but we have always had that level and are pretty confident that trend will continue.”
Markel’s combined ratio for 2010 was 95%, up from the 91% it posted in 2009. The company paid out $33m for the Chilean earthquake and Deepwater Horizon oil rig explosion, which added six points to the combined ratio. Davies said exposure to the New Zealand earthquake and Australian flooding were below $10m and so not considered significant.