@Beazley.
Los Angeles-based general insurer Mercury General Corporation said its Q1 2024 net realised investment gains, net of tax were $30.17 million, which was down considerably – a 22.1% drop – from 2023, which saw $38.7 million.
“Net realised investment gains before tax were $38 million and $49 million for the three months ended 31 March 2024 and 2023, respectively,” said the press release. “Higher net investment income before and after income taxes for [Q1] 2024 compared to the corresponding period in 2023 resulted largely from higher average yield combined with higher average invested assets and cash.”
It added that average annual yield on investments before and after income taxes for the Q1 2024 increased compared to the corresponding period in 2023, “primarily due to the maturity and replacement of lower yielding investments purchased when market interest rates were lower with higher yielding investments, as a result of increasing overall market interest rates, as well as higher yields on investments based on floating interest rates”.
Average annual yield on investments before income taxes was 4.4% for Q1 20204, compared to 4.0% for 2023.
The company, founded in 1960, has over 4000 employees.
Renters insurer Lemonade said they had a Q1 2024 gross profit $34.7 million increased by $18.2 million or 110% compared to Q1 2023.
Q1 revenue for the New York-based was $119.1 million increased by $23.9 million or 25% compared to Q1 2023. The Company’s cash, cash equivalents, and investments totalled approximately $927 million at 31 March 2024.
Last month, the company announced the launch of Homeowners insurance in France in partnership with BNP Paribas Cardif.
Beazley said its investment portfolio returned $126 million, or 1.2%, in the first quarter. “Financial markets were buoyed by resilient US economic data, with our equity, credit and hedge fund investments all producing strong returns,” said the company’s press release on the results.
“It has been a solid start to the year where we have demonstrated our ability to continue to grow whilst exercising underwriting discipline."
“Risk-free yields rose, as rate cut expectations subsided, resulting in more modest returns from our fixed income investments. However, the current yield of our fixed income portfolio (5.1% at the end of March) leaves it well placed to make a good contribution to our returns going forward.”
Net insurance written premiums were $1.23 billion for Q1 2024, compared to $1.11 billion for Q1 2023, an 11% increase year-on-year.
“It has been a solid start to the year where we have demonstrated our ability to continue to grow whilst exercising underwriting discipline,” said Adrian Cox, CEO. “We are confident of delivering our gross growth guidance for the year of high single digits. We remain optimistic about the outlook for our business in 2024 and beyond, focusing on continued, targeted growth and active capital management as the rate environment normalises.”
Bermuda-domiciled Everest Group said its net income for Q1 2024 stood at $733 million. It reported an operating income of $709 million, which was “driven by underwriting margin improvement and strong net investment income generation”.
Net investment income for the company increased to $457 million versus $260 million in Q1 2023, which was a company record, and was “driven by a larger asset base and strong core fixed income returns”.
Total invested assets and cash of $38.1 billion versus $37.1 billion on 31 December 2023.
Fellow Bermuda-domiciled finance concern Arch Capital Group also released their results this week, which said the net income available to common shareholders was $1.1 billion, compared to $705 million in Q1 2023.
In its investment results, the company said its pre-tax net investment income for the Corporate segment was $327 million for Q1 2024, compared to $199 million for Q1 2023.
“The growth in net investment income in the 2024 first quarter primarily reflected the effects of higher interest rates available in the market, along with growth in invested assets due in part to strong operating cash flows,” said the company’s press release. “Net realised gains were $67 million for the 2024 first quarter, compared to net realised gains of $17 million in the 2023 first quarter, and reflected sales of investments.”
The Bermuda-headquartered re/insurer said it had its sixth consecutive quarter of underwriting profits and net income of $90.8 million.
“Combined ratio for the Core operations is 91.4%, a 5% improvement over prior year, while net income is $90.8 million for the quarter."
The company saw a Net investment income of $78.8 million.
“Combined ratio for the Core operations is 91.4%, a 5% improvement over prior year, while net income is $90.8 million for the quarter,” said Scott Egan, CEO. “We also saw improvement in our Investment and Fee results. Net investment income was tracking higher than our FY 2024 guidance. Net service fee income from our Consolidated MGAs increased by 8.2% with an improved service margin of 30.1%.”
The company’s total net investment income and realised and unrealised investment gains for Q1 2024 was “primarily attributable to net investment income related to interest income from our debt and short-term investment portfolio of $76.9 million”.
“Increased investment income is primarily due to increased interest rates and our rotation of the portfolio from cash and cash equivalents and US government and government agency positions to high-grade corporate debt and other securitised assets, in an effort to better diversify our portfolio,” said the company.
Bermuda-headquartered specialist insurer Hiscox said their investment income result for Q1 2024 was $66.9 million compared to Q1 2023's $98.1 million, or a return of 0.8% year to date - compared to Q1 2023's 1.3%. It was "impacted by upwards pressure on bond yields as rate cut expectations moved out in the period".
Assets under management at 31 March 2024 were $8 billion, which is the same as the full year 2023. The overall duration of the bond portfolio increased to 1.8 years by the end of the quarter, said the press release, as the asset duration was brought more into line with that of the liabilities, and to position the portfolio to benefit from any reductions in rates later in the year.
"Although a marginal headwind to returns in the first quarter, it leaves the bond portfolio well positioned going forward," it said.
For Q1 2024, net income attributable to AIG common shareholders was $1.2 billion compared to $23 million in the prior year quarter said the US major in it press release. The increase was primarily driven by net realised gains on Fortitude Re funds withheld embedded derivative, compared to net realised losses in Q1 2023.
"In addition to outstanding profitability, this quarter was highlighted by the significant capital management actions we completed."
Adjusted after-tax income was $1.2 billion, for the first quarter of 2024, flat compared to $1.2 billion in Q1 2023, reflecting higher underwriting income and net investment income in General Insurance and improved results in AIG Other Operations excluding Corebridge, mostly offset by a 20% decrease in Corebridge’s earnings included in AATI due to the reduction in AIG ownership over the last year.
Total net investment income for the first quarter of 2024 was $3.9 billion, an increase of 11% from $3.5 billion in Q1 2023, primarily driven by "higher income from fixed maturity securities and loans due to higher reinvestment rates, partially offset by lower alternative investment returns and lower income on Fortitude Re funds withheld assets".
"In addition to outstanding profitability, this quarter was highlighted by the significant capital management actions we completed," said AIG Chairman & Chief Executive Officer Peter Zaffino.
Other companies such as Travelers and The Hartford, have already released their results.
