Canopius returns to profit in ‘transformational year’

Lloyd’s insurer Canopius made a 2012 profit after tax of £49m, compared with the company’s first-ever loss of £61m in 2011.

The combined ratio improved by 16 percentage points to 95% (2011: 111%).

The improvement was mainly driven by the lower level of natural catastrophe losses in 2012. Catastrophes and large losses added 12 points to Canopius’s combined ratio in 2012, compared with 24 points in 2011.

The attritional loss ratio, which excludes catastrophes and large losses, fell one point to 54% (2011: 55%), which Canopius said demonstrates “stable underlying profitability”.

As well as improving underwriting performance, Canopius also grew. Gross written premium increased 12% to £692m (2011: £616m).

The company also enjoyed a sharp jump in investment return to £40m (2011: £3m).

The performance came in a year when the US east coast was ravaged by Superstorm Sandy and Canopius completed its acquisition of fellow Lloyd’s insurer Omega.

‘Excellent’ results

Canopius executive chairman Michael Watson said: “2012 was a transformational year for Canopius: we successfully completed our fourth acquisition of a Lloyd’s business – Omega – boosting our premiums under management by 40% and our financial resources by 35%; we established a new executive team led by group chief executive Inga Beale (pictured); and, following a review of our strategy, created three business units that will be the engine of our future growth.”

Watson described the results as “excellent” despite taking a double hit from Sandy because of the inclusion of Omega’s results in Canopius’s numbers for the fourth quarter.

He said: “Our underlying return on equity was 19% and our combined ratio 92%, while the acquisition of Omega has provided significant premium growth, enhanced our standing in core classes, and increased our geographic spread.

“We remain committed to building Canopius and continue to look at businesses and teams that will contribute to underwriting excellence and deliver shareholder value.”

Beale added: “We owe the success of the integration of Omega to our experienced and talented employees, and we are well positioned for continued growth.”