JLT Re posts strong 2016 results despite price declines

JLT Re, the reinsurance arm of Jardine Lloyd Thompson Group, managed solid growth in 2016, partly boosted by two acquisitions, and improved profits as it overcame continued declines in pricing across most classes of business.

The unit increased its revenues by 13 percent to £195.6 million; its profit increased to £40.5 million compared with 32.4 million a year earlier, boosted by an improved trading margin which increased to 21 percent compared with 19 percent in 2015.

“This performance was delivered despite the well documented, multi-year decline in pricing across most lines of reinsurance and in most geographies and the continued consolidation in capital providers. JLT Re has continued to grow revenues and profits steadily despite consecutive years of downward rating pressure,” the company said.

The company added that it also continues to invest for future growth through both recruitment and its infrastructure and systems. It also completed two acquisitions in December 2016 in healthcare and the Central American region.

The reinsurance broker also commented on pricing in the industry, which it was still declining albeit at a slower rate.

“Looking to 2017 and the recent January renewals, a reduced rate of decline in prices from prior years has been evident, with global property-catastrophe pricing falling by 5.7 percent; this compares with 8.2 percent in 2016 and double-digit reductions in the two years prior to that,” it said.

“Casualty price reductions were, however, similar to those seen in 2016, with Specialty classes seeing more substantial rate reductions than other areas, but again, a reduced rate of decline was noted.”

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