NU Online News Service, Aug. 3, 2:03 p.m. EDT
Flagstone Reinsurance Holdings said second-quarter gross losses incurred from the Deepwater Horizon oil rig disaster were $45.7 million, including its Lloyd's operation.
But $22.9 million of loss expenses associated with the incident was taken on by Flagstone's sidecar, Mont Fort Re. Mont Fort's loss expenses do not impact Flagstone's net income, Flagstone said.
Flagstone, which changed its place of incorporation this year from Bermuda to Luxembourg, reported 2010 second-quarter net income of $13.3 million, down from $76.8 million last year.
Net income for the first six months was $44.8 million compared to $103.6 million in 2009. Along with the Deepwater event, six-month results were affected by losses due to the earthquake in Chile.
Flagstone's second-quarter combined ratio was 103.4 compared with 68.7 last year at this time.
Gross losses to Flagstone's reinsurance segment were $27.5 million from Deepwater Horizon, but the loss net of recoveries and reinstatement premiums to the segment was $4.4 million.
The reinsurance segment of Flagstone finished the second quarter with a 95.5 combined ratio compared to 64.7 for the 2009 second quarter.
Underwriting income for the second quarter fell 82 percent to $11.2 million due to catastrophic events such as the Deepwater Horizon oil rig disaster and riots in Thailand.
Net investment income decreased $2.4 million compared to the second quarter last year, but net premiums earned increased about 24 percent when comparing the same time periods.
Chief Executive Officer David Brown said the company would be selling three of its four airplanes, which is expected to produce an annual savings of more than $8 million.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.