16th Feb 2017 07:41
LONDON (Alliance News) - Specialist insurer Lancashire Holdings Ltd said Thursday its profit and premiums written dropped in 2016 amid pressure on prices.
FTSE-250 listed Lancashire reported a pretax profit of USD150.4 million for 2016, down 12% from USD171.7 million the prior year.
Lancashire's combined ratio, a measure of underwriting profitability, worsened to 76.5% from 72.1% in 2015. The further below 100% the ratio is, the more profitable the underwriting business.
Lancashire's gross written premiums in 2016 fell to USD633.9 million from USD641.1 million the prior year, while net premiums written dropped to USD458.7 million from USD481.7 million.
However, the company maintained its return on equity at 13.5%, the same as in 2015. Lancashire's fully converted book value per share declined to USD5.98 as at December 31 from USD6.07 at the same date in 2015.
Lancashire declared a final dividend of USD0.10 per share, bringing its total dividend for the year to USD0.90 per share. This compares to a dividend of USD1.10 for 2015.
"The 2016 year proved a turbulent one for the global political and macroeconomic environment and the insurance market remained very challenging. Risk capital remains abundant, and there is continuing pressure upon pricing and terms and conditions," said Alex Maloney, chief executive of Lancashire Holdings.
"Whilst we expect market conditions to remain difficult for the foreseeable future, which requires discipline and patience to navigate, our strategy has the ability to respond across the insurance cycle," added Maloney.
By Adam Clark; [email protected]
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