HCC Insurance Holdings Inc. posted a drop in fourth-quarter net income in part on catastrophe losses.
Net income fell to $78.3 million from $97.3 million. The results include pretax net catastrophe losses of $10 million and $117.9 million for the fourth quarter and full year of 2011, respectively. The losses added 1.9 and 5.3 percentage points to the company's GAAP net loss ratio for the fourth quarter and full year, HCC said in a statement.
John Molbeck, chief executive officer of HCC (NYSE: HCC), said during a conference call that rates are beginning to harden.
"As we look ahead to 2012, and beyond, we expect to see a continuation of the positive price movement we have been experiencing in the fourth quarter of 2011, and a return to double-digit returns," he said.
"We are very pleased how we ended the year 2011, but I don't think anyone in any industry was unhappy to see 2011 draw to a close," Molbeck said. "We are optimistic about the positive trends that we see in 2012."
The company's combined ratio rose to 86.8 from 82.3, while for the full year it rose to 90.8 from 84.6.
In October, HCC Insurance Holdings Inc. launched primary and excess casualty divisions. The primary casualty division, with underwriting teams in Chicago and Los Angeles, will focus on construction, manufacturing and premises risks, HCC said in a statement. The division is led by Chris Day. The excess casualty division, based in Chicago, will focus on construction, manufacturing, premises and public-entity risks and will be led by Phil Joschko.
Houston-based insurance-holding company HCC has subsidiaries that offer specialty coverage, including professional liability, accident and health, and surety insurance. Insurance is sold worldwide through independent agents and brokers, as well as through affiliated agencies and brokers, according to BestLink.