First-quarter figures this week from a range of insurers revealed mixed conditions. Reinsurers and Lloyd's underwriters are still benefiting from benign claims conditions and gently rising premium rates, as 2011's costly natural catastrophes influence pricing. But personal insurers, including recent London listings Direct Line and Esure, are struggling amid competitive UK conditions.
"The absence of any catastrophes and growth in profitable lines has delivered a very good start to the year," remarked Hiscox's (HSX) chief executive, Bronek Masojada. But progress for non-personal underwriters is generally limited to catastrophe-exposed classes with, for example, Munich Re (MUV2) reporting rate hardening "in marine insurance, following the losses from Windstorm Sandy and the Costa Concordia accident". But this may be losing momentum, and Hiscox expects rates to "decline during the June and July renewals". Bermudan-based Lancashire (LRE) saw first-quarter premium rates fall 2 per cent overall, compared to 2012's first quarter - although its marine account still saw rates rise 10 per cent.
Lancashire's combined ratio (of claims to premiums) improved from an already impressively profitable 74 per cent to a sector-beating 51.2 per cent. Meanwhile, Hannover Re's (HNRX) ratio improved from 96.8 per cent to 94 per cent, while Munich Re's improved from 94.6 per cent to 85.7 per cent.
At RSA Insurance (RSA), first-quarter rates for personal household business rose 9 per cent year-on-year in Scandinavia, and by 7 per cent in Canada. But RSA's UK rate increases were more subdued and UK motor rates slipped 4 per cent. That pressure is also apparent at Direct Line (DLG), too, with chief executive Paul Geddes revealing "the UK market remains competitive, particularly in motor". However, its combined ratio shifted to a profitable 98 per cent from last year's lossmaking 104.5 per cent. Esure's (ESUR) brief statement, meanwhile, reiterated that the UK personal lines market "remained competitive".
