Sompo's Bermuda reinsurance revenue nearly doubles after Aspen integration

Sompo International's Bermuda reinsurance unit booked $1.55 billion in first-quarter revenue, Reinsurance News reports. That is a 91.8 percent jump from a year earlier. The prior-year figure was $810 million. Sompo attributes the jump to the ongoing integration of Aspen's book and strong casualty renewals.

The growth did not sacrifice underwriting discipline. Global Reinsurance posted a 77.1 percent discounted combined ratio. That is 1.8 percentage points above the 75.2 percent it managed a year earlier. Sompo says casualty dynamics caused the drift. A combined ratio near 77 percent with a book nearly double its old size is rare in reinsurance.

Across Sompo International, total insurance revenue reached $5.55 billion in the quarter. That is 42.4 percent above last year. Adjusted profit came to $423 million, $51 million higher than a year earlier. It equals 24 percent of the full-year adjusted-profit target. That target is $1.74 billion.

Aspen's influence goes beyond reinsurance. Commercial Insurance revenue came to $3.63 billion for the quarter. That is 31.2 percent above the year-earlier level. Sompo credits Aspen's casualty and professional lines, plus agriculture expansion, for the gain. The commercial book's discounted combined ratio was 88.4 percent. That is 0.4 percentage point above a year earlier.

Consumer Insurance was the outlier. Revenue reached $363 million in the quarter. That is a 13.4 percent gain. Turkish motor-claim inflation pushed the segment's combined ratio to 117.9 percent. The ratio was 20.6 percentage points higher than a year earlier. The line is small within the group, but it is where the strain shows.

The group's discounted combined ratio settled at 87.6 percent. That is up from 85.7 percent a year earlier. Its undiscounted ratio was 97.4 percent. The 9.8-point gap shows how much of the reported profit relies on discounting.

The first-quarter result puts Sompo at 24 percent of its full-year adjusted-profit target. The rest of the year will test whether casualty pricing stays ahead of loss trends and whether Turkish motor claims stabilize. The 97.4 percent undiscounted group ratio is the number to watch. If discounting assumptions tighten, the 87.6 percent reported ratio will look less comfortable.