Brazilian reinsurance firm IRB Brasil Re has reported an underwriting lack of R$661.0 million (US $129.1 million) for the second quarter of 2022 as drought losses hit its agriculture enterprise.
The announcement comes simply ones day after studies urged the corporate is trying to elevate near $300 million by way of a brand new share providing.
The underwriting loss compares with a much less extreme lack of R$337.2 million for a similar interval within the earlier yr, with COVID-19 additionally persevering with to influence IRB Brasil Re on the life facet of its enterprise.
The reinsurer’s mixed ratio accordingly rose from 128.7% for Q2 final yr to 154.3% in the latest quarter, on a complete loss ratio of 124.2%.
Web earnings likewise fell from a lack of R$206.9 million to a lack of R$373.3 million, whereas written premiums additionally lowered from R$2,160.0 million to R$1,685.0 million, together with an enormous 42% lower in premiums written exterior of Brazil.
Trying on the first six months of the yr, the image is far the identical, with IRB Brasil Re’s underwriting loss rising fromR$204.6 million to R$757.4 million on a mixed ratio of 137.8%.
“The primary half of 2022 was very difficult for the insurance coverage and reinsurance market,” the reinsurers acknowledged alongside its outcomes. “The impact of the local weather points on agribusiness disrupted necessary crop productions, leading to big claims for agricultural producers and, consequently, for insurers and reinsurers.
“This related impact, mixed with the pandemic influence on life insurance coverage, raised the loss ratio to ranges not anticipated by the Firm, which already anticipated to reap the preliminary outcomes of the re-underwriting technique applied in 2022,” it defined.
Going ahead, the corporate assures that the influence of the portfolio changes will present a “gradual enchancment” in its underwriting consequence, as the newest contracts mature, with anticipated decrease loss ratio and the claims for the oldest contracts turning into much less related to its revenue or loss.