2007 net income of $168 million for Flagstone

Flagstone reinsurance has reported its results for 2007, with net income for the fourth quarter of $51.4 million, compared to $63.6 million for the same period in 2006. Whole year net income was $167.9 million, compared to $152.3 million for 2006.

Fourth quarter gross premiums written totalled $65.1 million, up 145.5% from the $26.5 million for the same period in 2006. Whole year gross premiums written was $577.2 million, up 90.8% from the $302.5 million for 2006.

Flagstone gave two reasons for their increase in GWP. Firstly, the increase was due to increased participations on programmes from existing clients and the addition of new clients. Secondly, the acquisition of controlling interest in Island Heritage in July resulted in an extra $11 million in gross premiums for that quarter, and $32.9 million in gross premiums for the year.

David Brown, CEO of Flagstone, said of the results: “We are very happy with the full year result, especially considering the level of catastrophes internationally and our focus on building a globally diversified book of business.

“Our share of international catastrophic losses serves to demonstrate that we have successfully developed a diversified portfolio of risks and, as a consequence, our results are not disproportionately dependant on the absence of catastrophes in North America.

“This diversification has been achieved thanks to our significant investment in growing our platform internationally with over 250 staff now working in nine offices in seven countries.”

He went on to say that: “As rates soften, the large flow of business generated by our global reach allows us to be selective in where we allocate our underwriting capacity which is currently deployed in what we consider the best priced segments of the reinsurance market.”

Net investment income for 2007 was up 115.7% compared to 2006, from $34.2 million to $73.8 million.

The company’s losses and loss adjustment expenses for the year were $192.9 million, giving a loss ration of 40.4%. This is compared to losses of $26.7 million and a loss ratio of 13.9% for 2006.

Major losses incurred in 2007 included gross losses of $9.3 million from the UK floods in southern England and Wales, $28.8 million for the UK floods in northern England, $32.4 million from Windstorm Kyrill, and $18.5 million for the floods in Australia.

Category: Companies News, Insurance News