Glacier Group Press Release
PRESS RELEASE
2009-03-19
Glacier Group
Glacier Group
- Full year results and trading update -
Pfäffikon, Switzerland: Glacier Group (‘Glacier’ or ‘The Group’),
the European insurer and reinsurer operating as Glacier Reinsurance AG and Glacier
Insurance AG, today announces its consolidated US GAAP financial results for the
year ended 31 December 2008.
Financial highlights:
- Total gross written premiums of $569.3 million, a 22.2% increase on the previous year (2007: $465.7 million).
- Net income of $26.2 million, a decrease of $43.3 million over the prior year (2007: $69.5 million).
- Net technical combined ratio was 99.6% (2007: 75.5%) reflecting the impact of the significantly higher level of risk and catastrophic losses during the year.
- The gross loss estimate in respect of Hurricane Ike has increased from $65 million to $100 million reflecting the overall increase in the market loss.
- Return on equity was 5.6% (2007: 18.7%), including net unrealized gains on investments.
- The Group’s net asset value increased to $496.0 million, an increase of $29.0 million or 6.2% (2007: $467.0 million).
- Total investments and cash increased to $784.1 million (2007: $705.4 million) reflecting a strong cash flow during the year.
- Overall net investment returns were 3.8% (2007: 6.0%) highlighting the conservative investment strategy of the Group.
- There is no exposure to US sub prime mortgage products either through the Group’s underwriting operations or its investment portfolio.
Operational highlights 2008:
Outstanding second year of operation for Glacier Insurance
Glacier Insurance’s business continued to thrive in 2008. Gross written premiums
were over $123 million, an increase of 298% over 2007 demonstrating Glacier Insurance’s
focus on growth in its chosen markets.
After opening of its Cologne office in early 2008, Glacier Insurance began underwriting
in London in March 2008. Richard Etridge, one of the founding members of the Glacier
team, was appointed CEO of Glacier Insurance in October, reporting to Group CEO
Robbie Klaus.
Glacier Insurance’s London operations are led by Managing Director Steven Price,
former Managing Director of QBE Europe’s operations. The London team has grown rapidly,
and in October relocated to a new permanent headquarters in Leadenhall Street, in
the heart of the London Insurance Market.
Tim Hofmeister was appointed Managing Director of Glacier Insurance’s Cologne office
in July. Tim has been with the Glacier Group in underwriting and risk management
roles since 2005.
Investment Portfolio performance
The Group benefited from its conservative investment strategy and only holds liquid,
high quality investments in its portfolio of fixed income securities and cash. In
line with our investment guidelines, all bonds are investment grade and are rated
“A” and above on purchase. The overall portfolio duration is 1.0 year as at 31 December
2008, broken down by currency as follows: USD 86%, Euro 10% with the remaining 4%
denominated in other secure currencies. The extreme volatility in financial markets
that continues today is a source of opportunity for Glacier as it maintains its
conservative investment approach through 2009. At the end of 2008, the Group had
net unrealised investment gains of $4.5 million.
Launch of Nelson Re II
In 2008 Glacier continued to benefit from the team’s capital markets experience
and their ability to secure further protection for policyholders and investors.
In June, Nelson Re Ltd issued three bonds totalling $180 million under its $1.5
billion catastrophe bond shelf programme sponsored by Glacier Re. The reinsurance
agreement provided Glacier Re and Glacier Insurance with fully collateralised excess
of loss protection for US hurricane, US earthquake and European windstorm perils.
Continued employee and infrastructure growth
In addition to the new Glacier Insurance offices in London and Cologne, Glacier
has established a representative and marketing office in Buenos Aires in February
2008 to serve the important Latin America market. The office is run by Uwe Fischer,
formerly Central & South American Underwriting Manager for Converium. Glacier Insurance
is opening an office in Central Zurich in April 2009, enabling it to better serve
brokers and customers in this increasingly important insurance centre. The Group
now employs over 90 people in its five offices worldwide.
Trading update and outlook for 2009:
Robbie Klaus, Chief Executive Officer and Chief Underwriting Officer of the Glacier
Group, commented:
“2008 was a challenging and turbulent year for the entire industry. Nevertheless,
Glacier has delivered a solid financial performance and the group is well positioned
to take full advantage of the improving insurance markets. We are proud of our personalised
customer service and underwriting expertise which, combined with our sound capital
base and prudent asset management has contributed to our success during this exceptional
year.
“Our investment in infrastructure and talent during 2007 and 2008 has paid off,
and whilst we will continue this investment – growing the London team and establishing
a base in Central Zurich – we expect our focus to shift towards the consolidation
of our position, taking advantage of opportunities to grow our premium income as
the underwriting climate changes.
“Renewals in the early months of 2009 have enabled us to benefit from positive rate
movements and we expect the pricing environment to continue to improve in coming
months. Glacier is well positioned to capitalise on these market developments, and
we look forward to enhancing our market position.”
Further information
Media
Haggie Financial
David Haggie / Juliet Tilley
Tel: +44 20 7417 8989
Notes to Editors:
About the Glacier Group
Glacier is an international insurance and reinsurance group, founded in December
2004 and headquartered in Pfäffikon, Canton Schwyz, Switzerland. The Glacier Group
had underwriting capital of USD 599 million as of 30 June 2008 and is rated A- (Excellent)
by A.M. Best.
Glacier Insurance
Glacier Insurance was incorporated in Liechtenstein in November 2006 and is licenced
by the Financial Market Authority in Liechtenstein. It operates from Liechtenstein,
Germany and the UK. It is a wholly-owned subsidiary of Glacier Reinsurance AG.
Glacier Reinsurance AG (Glacier Re)
Glacier Re was established in December 2004 and is regulated by the Federal Office
of Private Insurance in Switzerland. It operates from Switzerland.
www.glaciergroup.com