Glacierre Press Release
PRESS RELEASE
2007-02-28
Glacier Reinsurance AG
Full year results 2006 and trading update
Pfäffikon, Switzerland: Glacier Reinsurance AG, (‘Glacier Re’ or ‘the Group’), the
European (re)insurance group is pleased to announce its consolidated US GAAP financial
results for the year ended 31 December 2006.
Financial highlights for the year ended 31 December 2006:
• Pre-tax net income of $63.4 million, generating a post tax return on equity of
18.2%.
• Gross written premiums (before reinstatement premiums) of $292.6 million,
an increase of 43.5% on the previous year. Premiums written across all business
lines, excluding retrocession, increased during the period versus the prior year.
• Net combined ratio of 77.6%, reflecting a disciplined underwriting approach, business
diversification, low claims frequency and operating expense management.
• Net underwriting capital (including Trust Preferred Notes of $104.2 million) for
the operating companies increased to $498.3 million, a 22.9% increase on the previous
year.
• Investment income of $20.2 million generated from holding a secure and liquid
portfolio of conservative investments. The US dollar portfolio returned an investment
yield of 4.5% for the year. Investment and related assets form 68% of the Company’s
asset base at 31 December 2006.
2006 written premiums reflect a balance of geography and business lines and are
distributed as follows:
By territory: Europe (including UK) 45%; United States 34%; and, Rest of World 21%.
By class: Property & Casualty 33%; Marine & Energy 33%; Aviation and Space 17%;
Retrocession 13%; and, War and Terror 4%.
Operational highlights 2006:
Launch of direct insurance subsidiary
Glacier Insurance AG was launched in November 2006. Domiciled in Liechtenstein the
company plans to write gross written premiums of $20 million in its first full year
of operation. Glacier Insurance provides the Group with a platform to write direct
insurance business in Europe and the US (on a non-admitted basis) thereby increasing
overall group diversity.
Expansion of business in Latin America
Glacier Re was granted licences to write reinsurance business in the fast-growing
markets of Mexico (March 2006), Ecuador (November 2006) and Columbia (November 2006),
giving the Company a further platform for geographic diversification.
Employee and infrastructure growth
Professional staff levels have increased by over 50% during the year to over 30
people across all key disciplines. Glacier Re continues to attract high calibre
staff with long standing relationships and significant experience in all areas of
the business. The Group has hired a number of individuals in various roles including:
underwriting, risk management/actuarial and finance. In addition the Company continues
to invest significant resources in developing leading edge technologies to support
its disciplined underwriting approach, risk management and operational processes
as well as other customer focused value drivers.
Trading update and impact of Windstorm Kyrill:
1 January renewals and outlook 2007
During the 1 January renewals season Glacier Re wrote an estimated premium volume
of $167.7 million, an increase of 51% over the prior year. The Group targeted an
increased share of renewal business while acquiring a significant number of new
customers. The successful renewal season provides the basis for the 2007 planned
gross premiums of approximately $400 million.
Windstorm Kyrill
Glacier Re’s estimate of its net loss arising from windstorm Kyrill (18 - 19 January
2007) is between $8 million and $10 million. This estimate is based upon detailed
catastrophe modelling of the business lines potentially affected by the event combined
with a treaty-by-treaty review of all potential exposure. The estimate is an approximation
due to the wide area of physical damage and other uncertainties surrounding the
loss. While actual losses may materially differ from this estimate, the gross loss
is consistent with a market loss between $4 billion and $6 billion and is in line
with the Group’s expectations for an event of this size.
Robbie Klaus, Chief Executive Officer and Chief Underwriting Officer at Glacier
Re, commented:
“2006 has been a year of profitable growth for Glacier Re and these financial
and operational highlights reflect our successful and continuing evolution. Disciplined
underwriting, a benign claims environment and an ever-growing, talented team have
all contributed to an excellent year. We have continued to expand and diversify
our business while remaining focused on delivering unique, tailored reinsurance
and insurance solutions to our clients.
“Since Glacier Re began underwriting operations in January 2005, and despite the
levels of catastrophic loss experienced by the market in 2005, we have seen our
underwriting capital base increase by two thirds, from $300 million to almost $500
million; a sixfold increase in employee numbers; a new, purpose-built head office;
and added a new company to our operating structure. We look forward to our third
year of operations with our agenda of customer focus, balance sheet strength and
growth firmly established.”
Further information
Media
Haggie Financial
David Haggie / Juliet Tilley
Tel: +44 20 7417 8989