Insurer hit by increased claims and administrative costs
Mitsui Sumitomo Insurance Company (Europe)’s net profit for the year ended 31 December 2009 halved to £134,000 from £267,000 in 2009, despite a 32% boost in gross written premium to £151.5m and a 46.3% increase in profit before tax to £1.7m.
The company’s 2010 combined ratio also improved 30 percentage points to 98.9% from 128.9% in 2009.
Claims incurred, net of reinsurance, increased to £26.1m from £24.4m in 2008, but the firm said this was more than offset by reserve releases, which resulted in the net claims ratio improving 10.1 percentage points to 50.6 in 2009.
Administrative expenses increased to £29m in 2009 from £21.2m in 2008 as a result of the firm’s new businesses in Germany, France and Qatar. The company said the premium growth and release of redundant reserves allowed it to “maintain a small level of profitability”, however.