IPCRE pleased with “disciplined” class of 2005

In a first quarter results announcement Bermudian reinsurer IPC Re has welcomed the caution and discipline of the latest batch of entrants to the reinsurance market.

Reporting net income for the first quarter of $62.6m, compared to $44m a year earlier, IPC President and CEO Jim Bryce pointed to the first proper hard US Cat market since the early nineties, whilst lamenting softer conditions elsewhere:

"We were gratified by our US clients' recognition of the losses of 2005 and the increased cost of capital that we, and all reinsurers, now face, as reflected by price increases on US business that renewed on January 1, 2006. However, we were less satisfied by the lack of robust increases achieved on non-US business.

"The current trend during the second quarter to date is still a substantially improving rate environment in the US, and more encouraging signs outside of the US For the first time since the early 1990s, we are seeing signs of a 'hard market', characterized by a shortage of capacity for US national accounts, and/or retrocessional business generally, irrespective of price.

"We are also pleased to report that, in our opinion, new capacity that entered the market at the beginning of the year has been utilized in a cautious and disciplined manner to date. As a result of the events in 2005, there is a greater awareness of and sensitivity to both frequency and severity of catastrophic activity, again reflected by increased client retentions combined with robust pricing, as well as more conservative risk management and enhanced risk selection methodology, which we at IPC continue to adopt and develop.

"We remain watchfully optimistic about conditions in the property reinsurance industry for the remainder of 2006 and 2007."

In the first quarter of 2006, IPC said it wrote gross premiums of $235.6m, compared to $205.8m in the first quarter of 2005, citing price increases and new business.

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