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HARDY UNDERWRITING GROUP PLC FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2002

HARDY UNDERWRITING GROUP PLC FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2002 ANALYST PRESENTATION 26 MARCH 2003. profit before tax of £6.7m is very pleasing dividend improved from 6.5p to 7.25p all underlying years of account performing well

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HARDY UNDERWRITING GROUP PLC FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2002

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  1. HARDY UNDERWRITING GROUP PLC FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2002 ANALYST PRESENTATION 26 MARCH 2003

  2. profit before tax of £6.7m is very pleasing dividend improved from 6.5p to 7.25p all underlying years of account performing well market continues to look interesting but is still patchy syndicate investments have performed well over the year Group equity position mitigated by return on cash RESULTS OVERVIEW

  3. 2000 and prior years 2000 has closed with an overall profit of 7% pure year profit of 1.8% prior year release amounts to 5.2% end of weak market: premium base of £16.5m all prior years showing benign claims development UNDERWRITER’S OVERVIEW

  4. 2001 pure year profit forecast in range 6.5% to 11.5% net premiums forecast to reach £30m incurred loss ratios stabilising WTC remains at $2.6m net; no material involvement in other major 2001 losses all accounts progressing well and expected to contribute to final result UNDERWRITER’S OVERVIEW (continued)

  5. 2002 year continues to progress well: combination of rates and low claims incidence should produce a very satisfactory result net premium volumes forecast to reach £42m/gross premium £56m quota share syndicate not needed: disappointing airline renewals general aviation very promising cargo – including specie and jewellers block, developed more than originally anticipated marine hull – less competition for small craft/fleets; bluewater hulls not there yet in rating terms non-marine – rates satisfactory but volumes disappointing; new niche lines now introduced UNDERWRITER’S OVERVIEW (continued)

  6. 2003 syndicate capacity £100m; gross premiums forecast at £85m overall market rating levels are holding up reasonably well (although not consistently) aviation - focus is on general aviation book - internet product now in use - will continue to be selective on airline involvement marine including cargo - hull market improvements are steady - cargo continues to be well-rated/ specie developing well non-marine - catastrophe account expanded geographically - accident and health book introduced UNDERWRITER’S OVERVIEW (continued)

  7. FINANCIAL HIGHLIGHTS Group share of gross premium written up by 45% to £46.8m (2001 - £32.2m) profit before tax of £6,659,000 (2001 - £3,192,000) gain on Atrium investment £1.45m operating profit, assuming long term rate of return, excluding gain on Atrium investment, of £6,518,000 (2001 - £4,648,000) combined ratio 81.8% (2001 – 83.2%) dividend proposed 7.25p (2001 – 6.5p)

  8. profit not volume focus is being maintained (e.g. airline business not renewed) existing core business is being developed as are new niche lines overall underwriting environment continues to be promising reserving approach robust and no material exposure to reinsurance bad debt on track to meet our 10% average return on capacity target will increase syndicate capacity for 2004 should current market conditions continue will purchase syndicate 382 capacity if the price is reasonable will continue as a niche quality player and maintain existing underwriting philosophy but wish to expand the business further both inside and possibly outside Lloyd’s THE FUTURE

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