NU Online News Service, March 9, 2:00 p.m. EST
Omega Insurance Holdings Ltd. Chairman John Coldman said he and CEO Richard Pexton got a "baptism by fire" since they joined the company, as the Bermuda-based insurer and reinsurer posted a $42.8 million 2010 loss.
Within a week of their arrival to Omega a year ago, the company was affected by the Chilean earthquake, Mr. Coldman said.
Losses from earthquakes in Chile and New Zealand, the Deepwater Horizon oil-rig disaster, Australian floods, and the sinking of a semi-submersible drilling rig as well as rate reductions drove the yearly loss.
"The rating environment remains challenging and short-term profitability will be constrained as a result," Mr. Coldman said. Omega's board has chosen not to pay a final dividend for 2010.
Mr. Pexton said the loss ratio for Omega increased to 84.4 from 49.3 in 2009 due to the catastrophes and single-loss events, which accounted for losses of $65 million, net of reinsurance and reinstatement premiums.
The chief executive outlined his observations since taking over last year, including his thought that Omega's book of business "was more volatile than I had expected, with the group having expanded in more recent years into classes of business with greater catastrophe exposure and larger insureds." Omega was "playing catch-up with the more sophisticated players in the industry in the areas of risk management, modeling, data quality and analysis, and control."
The company has cut back on its offshore energy business and scaled back its international retrocessional reinsurance segment, which was hit hard by the catastrophes in Chile, Australia and New Zealand. Already the account has been reduced to $4.2 million in 2011 from $16.4 million in 2010, Mr. Pexton said.
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