Rising claims costs across parts of its portfolio, along with higher reinsurance and operating expenses, pushed IronRock Insurance Company Limited into a loss for the third quarter (Q3) ended September 30, 2025.

While most classes performed in line with expectations, the company noted that the motor segment continued to face market-wide pressures, with claims costs rising 28 per cent year-over-year.

These elevated motor losses, combined with higher catastrophe-related reinsurance costs tied to the company’s expanding portfolios, resulted in the Insurance Service Result declining to $11.8 million from $20.3 million a year earlier.

“Operating expenses also continued to exceed the prior year, driven by sustained increases in professional and regulatory fees and the ongoing costs related to our expansion activities,” CEO Christian Watt said in a recent report to shareholders.

Providing further context on the company’s performance in an interview with the Jamaica Observer on Thursday, Watt said that the results were within expectations.

“We embarked at the beginning of the year on an expansion strategy, where we moved into a new office and grew the team slightly, which brought higher expenses. This has been one of the primary drivers of the result, as well as the general growth of motor claims industry-wide. These two items, along with the rise in reinsurance costs, were what really drove the results seen,” he explained.

“The result for Q3 was within our expectations given the expansion and other developments. We are, however, anticipating a more favourable and positive result in the last quarter. As our history shows, we’ve always had lower results during the year as we reconcile our portfolio, but as we go throughout the year we tend to see better out-turns — as demonstrated by the last six years in which we have remained largely profitable,” Watt further told BusinessWeek.

For the reporting period, reinsurance contract expenses also climbed 30 per cent to total $358.1 million, while insurance service expenses increased 12 per cent to $164.9 million. Other operating expenses for the quarter totalled $51.8 million.

The combined effect of these rising expenses resulted in a quarterly net loss of $10.1 million and a nine-month loss of $41.5 million, reversing the net profits of $7.8 million and $8.1 million earned over the corresponding periods in 2024.

Despite the setback, IronRock maintains that its balance sheet remains strong. Management highlighted the company’s resilience and strategic progress, noting that gross written premium grew 36 per cent over the nine-month period. This, as insurance revenue rose 21 per cent to $534.8 million for the quarter and reached $1.56 billion year-to-date. Investment income also remained stable at $77.5 million.

Total assets as at September 30 stood at $1.74 billion, while shareholders’ equity totalled $752.5 million.

“This continues to demonstrate the effectiveness of our underwriting strategy led by strong demand in the fire, liability, and engineering segments. This growth has been supported by disciplined risk selection and the enhanced reinsurance capacity secured earlier in the year,” Watt said.

Shortly after the quarter’s close, Hurricane Melissa passed over Jamaica on October 28, prompting IronRock to activate its storm response protocols. With the company left largely unscathed by the storm’s Category 5 impacts, it was able to report uninterrupted operations given its ability to initiate early client outreach and swift mobilisation of adjusters.

“Based on preliminary assessments, we do not anticipate any material impact on the company’s solvency. We are fully engaged in supporting our clients through the assessment and settlement of their claims and remain committed to helping restore homes, businesses, and livelihoods as the nation recovers,” Watt added.

Despite reporting losses for both the quarter and year-to-date, IronRock’s management said the company remains well-capitalised and backed by a robust reinsurance programme that positions it to withstand market volatility.

“As IronRock enters the final quarter of the year, we are confident in our ability to manage the near-term environment while continuing to build long-term value for our shareholders,” the report stated.

WATT…we embarked at the beginning of the year on an expansion strategy where we moved into a new office and grew the team slightly, which brought higher expenses. This has been one of the primary drivers of the result, as well as the general growth of motor claims industry-wide.