14th Feb 2019 09:28
LONDON (Alliance News) - Lancashire Holdings Ltd returned to a profit in 2018, the company said Thursday, with underwriting operations also becoming profitable once again.
The FTSE 250-listed insurer posted a pretax profit of USD33.6 million for 2018, compared to a loss of USD72.9 million in 2017.
In 2017, Lancashire cut its dividend after swinging to a loss after a year filled with a series of natural catastrophes.
Lancashire is paying a final dividend of 10 cents per share for 2018, taking the year's total to 35 cents after paying just 15 cents in 2017.
The company's combined ratio, a measure of underwriting profitability, was 92.2% in 2017 compared to 124.9% in 2017. A figure under 100% denotes underwriting profitability.
The net loss ratio for 2018 was 40.0%, from 78.4% a year before.
Lancashire's gross written premiums climbed to USD638.5 million from USD591.6 million a year prior, with net premiums up to USD417.7 million from USD398.0 million.
Return on equity was 2.4%, from a negative 5.9% in 2017, despite a second year in a row of "above average" global catastrophe losses.
"The fourth quarter of 2018 once again witnessed higher levels of loss activity than average, with the occurrence of hurricane Michael in October and a further series of catastrophic wildfires in California causing a tragic loss of life," said Chief Executive Alex Maloney.
"When considered with the other major loss events during the year, 2018 ranks amongst the four largest loss years of the last couple of decades. Following 2017, this is the second year in succession of well above average global insured catastrophe losses," Maloney continued.
"Against this backdrop, the group has generated a positive return on equity for the full year of 2.4%. Overall, I am pleased at the resilience of our portfolio and our reinsurance programme, given the loss environment."
Looking ahead, Maloney is "encouraged" by new business momentum though the trading environment is still challenging.
Shares were 4.0% higher on Thursday morning at a price of 618.50 pence each.
Related Shares:
Lancashire Holdings