Insurer Omega shares the pain of disasters
Omega chairman John Coldman today lamented a "baptism of fire" for the Lloyd's of London insurer's new management team, as a string of catastrophes sent it plunging into the red with a $42.9 million (£26.5 million) annual loss.
Coldman and chief executive Richard Pexton were brought in a year ago to head up the firm after a shareholder revolt led by Invesco Asset Management, but its shares tumbled 14% or 14.25p to 86.50p following the disappointing results.
Earthquakes in Chile and New Zealand, the Queensland floods in Australia and BP's catastrophic Gulf Of Mexico oil spill cost the company $65 million in premiums.
"To say ours was a baptism of fire is an understatement," Coldman said.
The bigger than expected losses compared with a $43.6 million profit the previous year and Pexton called them an "obvious disappointment".
He said changes since the new team took over - including reducing the firm's offshore energy business and reinsurance risk - would cut losses by a third in the event of a repeat of last year's disasters.
But Pexton added that a glut of capital among insurers after a benign US hurricane season would add to competition and squeeze rates, and constrain short-term profitability.
