25th Jul 2019 11:03
(Alliance News) - FTSE 250-listed speciality insurance firm Lancashire Holdings Ltd held its interim dividend Thursday despite profit and premiums falling, although it began to see new business momentum build in the first half of the year.
For the six months ended June, pretax profit narrowed 46% to USD40.5 million from USD74.9 million the year prior. This was after net written premiums fell 4.9% to USD222.6 million from USD234.0 million the year before.
"I am pleased with our performance in the first half of 2019," Lancashire Chief Executive Officer Alex Maloney said. "I am also encouraged by the emerging evidence that the (re)insurance market is now experiencing the long anticipated improvements in discipline and pricing in many of the group's core business lines."
"We have seen good new business momentum in the first half of 2019, as we were able to benefit from our longstanding disciplined underwriting approach," Maloney added. "In the face of a more cautious underwriting environment and evidence of market retrenchment in the specialty lines in which we write, we were able to take advantage of improving terms and demand."
Lancashire proposed a 5 US cents interim dividend per share, unchanged on the year prior.
"While the market overall was characterised by a number of attritional losses in the first half of 2019 and substantial loss creep on prior year events, it is worth noting that our ultimate net loss estimates for the 2018 and 2017 catastrophe events have remained largely stable, allowing us to deliver a solid combined ratio of 86.6% for the half year," Maloney continued.
Lancashire reported its combined ratio rose to 86.6% from 67.1% the year prior. Any combined ratio below 100% shows Lancashire made a profit from its underwriting.
"Looking ahead, the recent evidence of better market discipline and pricing will take time to feed through to our bottom line," Maloney said. "However, I believe that we have the talent and capability to capitalise on the next stage of the (re)insurance cycle, and our strategy has positioned us well to maximise the improving underwriting opportunity."
Shares in Lancashire were 2.9% lower at 717.50 pence in London on Thursday.
Related Shares:
Lancashire Holdings