Hampden GWP doubles

Limited liability Lloyd’s investment vehicle Hampden Underwriting, announced half-year pre-tax profit had fallen nearly 15% but net profit was up 28% on a doubling of premium income.

Financial highlights (2008 in brackets)

• Gross premium written £5.344m (£2.788m)
• Reinsurance premium ceded £1.255m £0.562m
• Net premiums written £4.089m (£2.226m)
• Net earned premium £3.184m (£0.681m)
• Revenue £3.506m (£0.899m)
• Net insurance claims and loss adjustment expenses £1.898m (£0.430m)
• Pre-tax profit £126,000 (£148,000)
• Net profit £138,000 (£108,000)

Chairman, Sir Michael Oliver, said: “I am delighted that for the six months to June 2009 we are reporting a profit of £138,000. This is largely due to the purchase of the two namecos which gave us exposure to the highly successful 2006 year of account.

“The prospects for the future appear extremely encouraging. The initial 2008 Account estimates (the first year of underwriting for our principal subsidiary) show an average profit on capacity of 6%, outperforming the Lloyds market estimate of 3%.'

“Hampden Agencies, our Members' Agent, has advised that the global recession appears to have delayed the onset of a hard market in 2009 with weak economies reducing demand for Insurance. Nevertheless, they still feel a result of 5%-7.5% is achievable. Their target for 2010 is a result of 5%-10%.

“With the likelihood of continued lower investment returns; underwriting profits are necessary in order for insurance companies to make an acceptable return on equity. The investment case for investing in Lloyd's therefore remains intact. As I said in our last annual report, we are considering the possibilities of raising further capital from both existing and new investors to enable us to continue to look at all opportunities with a view to generating attractive returns for our shareholders.