But no news on future plans after shareholder revolt

Embattled Omega Insurance announced Q1 figures showing 18% growth in the Group's gross written premium to $124.5m (2009: $105.5m). It estimated its net loss estimate from the Gulf of Mexico Deepwater Horizon incident at $5.6m.

But it made no comment about future direction following the shareholder battle that saw most of the board cleared out and replaced. Omega chief executive Richard Pexton said an announcement would come “in due course”.

GWP by segment £m (2009 in brackets)

  • Participation in and reinsurance of Syndicate 958 87.4 (75.3) 16%
  • Omega Bermuda 26.5 (23.4) 13%
  • Omega US 10.6 (6.8) 56%
  • Total 124.5 (105.5) 18%

GWP by class of business £m (2009 in brackets)

  • Non marine property (inc onshore energy) insurance 18.6 (16.3) 14%
  • Property catastrophe reinsurance 55.7 (51.0) 9%
  • Property per risk treaty reinsurance 5.3 (5.4) -2%
  • Professional indemnity insurance 2.7 (2.8) -4%
  • Motor insurance and reinsurance 14.9 (7.5) 99%
  • Offshore energy and marine insurance 7.2 (6.0) 20%
  • Liability insurance and reinsurance 14.7 (10.2) 44%
  • Other 5.4 (6.3) -14%
  • Total 124.5 (105.5) 18%

Pexton said: "The results for the period reflect the high level of natural catastrophes, the large Deepwater Horizon rig loss; costs associated with the SGM and continued prudent underwriting.

“It is pleasing to see premium growth, as a result of growing our newer platforms and our increased participation on the Syndicate. John Coldman and I look forward to concluding our review and reporting to shareholders in due course".

US catastrophe

Omega said a benign US catastrophe loss experience during 2009 has resulted in overcapacity in the US reinsurance market and rate reductions of 5% to 10% were given during the key 1 January renewal season. Overall margins still remain attractive.

International catastrophe business has been under pressure for some time, with further rate reductions of 3% experienced during the recent 1 April renewals. This softening has led us to incrementally reduce our participation in this class. So far the recent loss activity has not had any material impact on international rates.

Pricing and renewals on the non-marine property insurance book remains steady. Our selective approach to underwriting principally through the use of well established binding authorities concentrating on small, commercial business which remains sheltered from aggressive competition has allowed us to protect our margins.

Deepwater Horizon

The recent losses arising from the sinking of the Deepwater Horizon rig mean that the expected pressure on rates for the mid year will not now materialise as we expect rates to improve in offshore energy.

Syndicate 958 The Group's share of gross premiums written by Syndicate 958 for the first three months of the year is up by 16% to $87.4m (March 2009: $75.3m).

Business derived from Syndicate 958 is a combination of the Group's share of Syndicate 958 underwriting, through ownership of Syndicate capacity, and a 20% quota share reinsurance of the Syndicate.

Syndicate capacity for the 2010 year of account increased in sterling terms from the 2009 level but this is due to the effects of the strengthening US dollar. In US dollar terms capacity reduced from $496m to $420m.

Catastrophe exposure

In 2009 the Syndicate increased its catastrophe exposed writings in the context of a strong rating environment. As catastrophe rates have eased we have allocated more capital to other lines, for example the motor account has seen solid growth.

The successful capacity offer in July 2009 and further purchases of capacity in the November capacity auctions brought the Group's share of the Syndicate up to 38.8% (2009: 16.4%) for 2010. The full effect of the increased business derived from the Syndicate will be felt in 2011 and 2012.

Bermuda operations

Omega Specialty, Bermuda Gross written premiums for the first three months of the year were up by 13% to $26.5m (March 2009: $23.4m). This is predominantly US catastrophe exposed treaty excess of loss business written in the Bermudian reinsurance market.

Omega Specialty continues to build its profile and relationships within the market and is well positioned and established for growth as conditions improve.

US premiums

Omega US Gross written premium was $10.6m for the three month period (March 2009: $6.8m), representing a 56% increase. This formative business continues to expand its footprint through new agencies.

With the infrastructure and team now in place, the business is focused on developing a profitable underwriting business. The rating environment in the US excess & surplus market remains challenging but positive margins are still available.

In these conditions we will continue with our selective and profit-focused approach to underwriting, concentrating on steady growth whilst we wait for the market upturn.

Claims

There have been a number of catastrophe and large risk losses in the period. These include the Chile, Mexico and Haiti earthquakes, European windstorm Xynthia, Gulf of Mexico Deepwater Horizon incident, Australian storms and the US winter storms.

As was communicated on 31 March, our initial estimate of losses arising from the Chilean earthquake is currently $23m. This estimate has not changed and is based on market loss estimates of between $5.5bn and $8.5bn and a ground-up assessment of individual contracts across our portfolio.

Our exposure to Chile is predominately through our international treaty reinsurance account. We have some exposure to the Gulf of Mexico Deepwater Horizon loss through our offshore energy account; with a current estimated net loss of $5.6m.

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