US and Europe enjoy good times
It’s profit season in international insurance circles, and most insurers seem to be taking the “p” word as literally as possible. Earnings are up, despite lower average premiums, thanks mainly to a catastrophe-free 2006.
US giant AIG, for example, reported a $US3.44 billion ($4.43 billion) net profit for last year, up 13% on its 2005 result.
Investment giant Berkshire Hathaway’s insurance operations returned to full strength, after a hurricane-ravaged loss of $US1.07 billion ($1.38 billion) in 2005. Last year’s $US1.66 billion ($2.2 billion) underwriting profit was a welcome relief, with US analysts worrying earlier about the possibility of “super catastrophes”.
European insurers have fared just as well. The UK’s Aviva reported a 12% rise in profit for 2006. It says its aggressive growth strategies paid off, helping it book a £3.25 billion ($8.07 billion) result for the year.
Munich Re posted a record net profit in 2006, pleasing shareholders with a €3.5 billion ($5.92 billion) result. CEO Nikolaus von Bomhard says the company is enjoying substantial demand at present and should be able to achieve more growth in 2007.
Rival Swiss Re doubled its net profit last year thanks to the low claims environment and the acquisition of General Electric reinsurance businesses. Its CHF4.6 billion ($4.87 billion) result was well above analysts’ expectations.
Meanwhile, leading British international broker Jardine Lloyd Thompson (JLT) Group announced a modest turnaround in its 2006 results. CEO Dominic Burke announced a before-tax profit of £76.5 million ($198.8 million) profit on turnover of £459.5 million ($1.14 billion).
The profit compares with the 2005 result of £73.6 million ($182 million).
JLT sold its US operations last year and cut 100 jobs in its London office. Mr Burke says falling rates are stifling growth for brokers. “There is greater capacity chasing fewer and fewer risks,” he said.
US giant AIG, for example, reported a $US3.44 billion ($4.43 billion) net profit for last year, up 13% on its 2005 result.
Investment giant Berkshire Hathaway’s insurance operations returned to full strength, after a hurricane-ravaged loss of $US1.07 billion ($1.38 billion) in 2005. Last year’s $US1.66 billion ($2.2 billion) underwriting profit was a welcome relief, with US analysts worrying earlier about the possibility of “super catastrophes”.
European insurers have fared just as well. The UK’s Aviva reported a 12% rise in profit for 2006. It says its aggressive growth strategies paid off, helping it book a £3.25 billion ($8.07 billion) result for the year.
Munich Re posted a record net profit in 2006, pleasing shareholders with a €3.5 billion ($5.92 billion) result. CEO Nikolaus von Bomhard says the company is enjoying substantial demand at present and should be able to achieve more growth in 2007.
Rival Swiss Re doubled its net profit last year thanks to the low claims environment and the acquisition of General Electric reinsurance businesses. Its CHF4.6 billion ($4.87 billion) result was well above analysts’ expectations.
Meanwhile, leading British international broker Jardine Lloyd Thompson (JLT) Group announced a modest turnaround in its 2006 results. CEO Dominic Burke announced a before-tax profit of £76.5 million ($198.8 million) profit on turnover of £459.5 million ($1.14 billion).
The profit compares with the 2005 result of £73.6 million ($182 million).
JLT sold its US operations last year and cut 100 jobs in its London office. Mr Burke says falling rates are stifling growth for brokers. “There is greater capacity chasing fewer and fewer risks,” he said.