Omega makes $34.2m loss

Lloyd's insurer Omega has posted an H1 pre-tax loss of $34.2m compared with a profit of $22.9m for H1 2009.

It blamed catastrophe losses and poor reserving for prior year claims for its combined ratio climbing from 82.5% to 128.3%.

Losses included

• the earthquake in Chile
• the explosion on the Deepwater Horizon oil rig
• the loss of the Aban Pearl submersible.
• hailstorms in Australia and the US
• increased attritional activity.

“Syndicate 958 was also impacted by reserve additions relating to the Apache oil rig loss in 2008, together with adverse development on the 2007 underwriting year on the energy account, and 2008 underwriting years on longer tail lines including liability, professional indemnity and motor,” Omega said.

“The reserve strengthening was determined by a detailed actuarial review following the period end, with input from independent actuarial advisers.”

H1 financial highlights (2009 in brackets)

• Gross premiums written $244.1m ($187.5m)
• Net earned premiums $105.6m ($90.1m)
• Claims incurred net of reinsurance $105.7m ($46.9m)
• Net underwriting charges $29.7m ($27.5m)
• Underwriting loss/profit -$29.8m ($15.7m)
• Premiums ceded to reinsurers $42.1m ($24.1m)
• Group combined ratio 128.3% (82.5%)
• Loss/profit before tax -$34.2m ($22.9m)

Richard Pexton, chief executive officer said: "The first half of the year experienced a number of significant catastrophes, combined with a challenging rating environment. These catastrophe losses, together with the lag that currently exists in 2010 premium earnings, have had a major effect on our half-year results.

“In response we continue to monitor the rating environment closely and maintain our selective and focused approach to underwriting. We do not believe now is the right time for significant growth. This is the time to position ourselves for a correction in the market.

Underwriting platform

"After completion of the business review encompassing underwriting, corporate governance and operations we have concluded that Omega remains a strong underwriting platform.

“Despite the losses we have sustained during this period our business is robust we are confident about our strategy and the future prospects for the Group. With this background the Board is comfortable to maintain the dividend."