Canopius posts first-ever loss due to cat claims

Lloyd’s insurer Canopius made a loss after tax of £61m in 2011 - its first ever - compared with a profit of £43m in 2010.

The high level of natural catastrophes in 2011 added 24 points to Canopius’s combined ratio pushing it to 111% (2010: 92%).

Investment results we also down, with the company achieving a 0.4% return on average invested funds.

“The string of natural catastrophe events during 2011 resulted in the first loss in our eight year history and was magnified by our weighting towards international business,” Canopius executive chairman Michael Watson said in a statement. “Whilst we are disappointed, we are not downhearted. 2011 was another year of good progress for Canopius, including the successful recruitment of new teams and the launch of additional platforms that ensure we are well-positioned to continue expanding our franchise.”

During the year, Canopius hired Inga Beale as chief executive and Tim Rolfe as chief executive of UK retail. It also promoted four division heads and formed a new political risks and crisis management division, headed by Simon Low. In addition Canopius launched  a Zurich-based reinsurance operation, Canopius Europe.

The company also boosted gross written premiums by 9% to £616m (2010: £564m).

The 2011 losses have eroded Canopius’s capital position. Tangible assets fell 21% to £239m (2010: £303m) and group financial resources fell 14% to £367m (2010: £429m).

However, Watson said: “Our group’s financial position remains robust. We are increasing the overall scale of our businesses in 2012 and will continue to look at further opportunities for growth, both organic and through merger and acquisition.”