Omega up 5% as chair quits

Omega Insurance announced a 5% growth in gross written premium in the first nine months of 2009 to $247m ($236m) but said chairman Walter Fiederowicz is to quit.

Fiederowicz has informed the Board that he intends to step down as to devote more time to his other business commitments. He will remain until the appointment of a successor.

GWP for nine months (2008 in brackets)

• Third party Bermuda reinsurance $66m $39m
• Omega US $27m $3m
• Participation in and reinsurance of Syndicate 958 $154m $194m
• Total $247m $236m

GWP by class of business

• Non marine property insurance $43m $60m
• Property catastrophe reinsurance $103m $69m
• Property per risk treaty reinsurance $17m $14m
• Professional indemnity insurance $7m $10m
• Motor insurance and reinsurance $11m $13m
• Marine insurance and reinsurance $27m $45m
• Liability insurance and reinsurance $25m $15m
• Other $14m $10m
• Total $247m $236m

Richard Tolliday, chief executive, said: "Growth in the US and Bermuda, combined with our increasing participation in Syndicate 958, underpins Omega's potential to deliver strong growth in 2010 and beyond.

“The rating environment has been, and remains, steady in our core lines offering substantial margins. Our loss ratios reflect the absence of major claims experience so far in 2009."

Rate increases

Omega said: “Premiums have benefited from the continuing rate increases in catastrophe exposed lines of business. Omega has written a higher proportion of catastrophe exposed business than in the previous year, taking advantage of the attractive rating environment.

“Rate increases in non-US catastrophe business generally remain lower than we would want to see in order to justify increasing our previously reduced participation in that area.

“In the US surplus lines market, where most of our non-marine property business is sourced, the rating environment remains steady with significant increases again restricted to the catastrophe exposed business.

Professional Indemnity

“Other areas such as professional indemnity continue to see considerable rate pressure. We have chosen to continue to reduce our exposure in such weaker areas, demonstrating our ability to flex our diversified portfolio in response to market conditions.

Lloyd’s fall

“Business derived from the Syndicate is a combination of the Group's share of Syndicate 958 underwriting, through ownership of Syndicate capacity, and Omega Specialty's quota share reinsurance of the Syndicate.

“Gross written premium from this source has fallen compared to the prior year from a combination of reduced Syndicate underwriting and the effect of the removal of inflated quota share arrangements on the 2007 year of account.

“Within the Syndicate, the proportion of strongly rated US catastrophe exposed business increased but we have made reductions in other areas where rates have been lower than we would like. The Syndicate has also withdrawn from marine excess of loss business.

“In addition, as highlighted in our half year results, 2008 premiums were inflated by the one-off step up in the 2007 year of account quota share arrangements with Syndicate 958. The 2007 year of account quota share percentage was 27.5%; for all subsequent years it has been 20%.

“In 2010 and in 2011, business derived from the Syndicate will increase as a result of the Group's increased share of Syndicate 958 following the successful capacity offer in July 2009 and our further purchase of capacity in the November auction.

Board developments

The Board has appointed Korn/Ferry to conduct the search for a new chairman who is expected to be appointed by the end of the year.

The Board has also appointed Christopher Clarke as senior independent director with immediate effect. Clarke was appointed as a non-executive director of the Group in March 2005, is chairman of the Investment Committee and is a member of the Audit Committee.