26th Jul 2018 10:02
LONDON (Alliance News) - Lancashire Holdings Ltd on Thursday posted a rise in interim profit as gross premiums grew, though it noted that pricing peaked at the beginning of the year.
For the half year ending June 30, gross premiums written totaled USD392.5 million in the first half of the year, up from USD381.2 million a year previously, as net premiums written dipped 2.4% to USD234.0 million from USD239.8 million.
Pretax profit climbed 12% to USD74.9 million from USD66.7 million last year.
The insurer's combined ratio of the period came in at 67.1%, improved from 78.4% last year. A score below 100% indicates underwriting profitability.
Return on equity in the year-to-date was flat on last year at 5.9%.
"Our earlier predictions of how the insurance market would respond following the 2017 loss events are proving to be accurate. Pricing peaked at the January renewals and we are now experiencing a decline from those levels, although we remain in positive territory for the year to date," said Chief Executive Alex Maloney.
Mahony said the company has been able to take advantage of rate increases across most lines of business, despite second quarter gross premiums written falling 4.3% to USD176.7 million.
The CEO highlighted the rate increases and growth seen in the quarter were actually "masked by the impact of the timing of renewal of some multi-year deals and some prior underwriting year premium that came through in the second quarter of 2017".
"We will watch this year's wind season with interest. While we believe that there is still too much capital in the market, another year of losses may serve to dampen appetite," Maloney added.
The firm declared an interim dividend of 5 US cents per share, in line with last year.
Shares in Lancashire were down 6.1% at 536.50 pence on Thursday, among the worst performers in the FTSE 250.
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Lancashire Holdings