Hardy is to reduce the capacity of Syndicate 382 in the 2005 year of account by 13% from £115m to £100m.
The Lloyd's insurer said underwriting conditions remained strong in a number of the niche areas in which the syndicate wrote business, and that while other classes may have peaked, the potential for good profit across the book remained.
Hardy made the announcement as it released its updated forecasts for the Syndicate. It said it expected to report profits of between 7% and 12% of capacity for Syndicate 382 in the 2003 year of account.
The Lloyd's insurer also said the forecast for the 2002 year of account remained unchanged at 13.5% to 18.5% of capacity.
“As previously advised, this return on capacity has been affected by a lower than expected capacity utilisation which, in turn, has been impacted by a deterioration in the value of the US dollar.”
Approximately 70% of the Syndicate's income was received in US dollars, said the company.
Hardy said the forecast for the 2002 year of account on written income was for 16.4% to 22.4% of gross written premiums, net of commission, and for the 2003 year of account was for 10.8% to 18.6% of gross written premiums, net of commission.
Hardy owns 79.9% of the 2002 capacity of £54m, 80.4% of the 2003 capacity of £100m and 87.8% of the 2004 capacity of £115m.
Hardy chief executive Barbara Merry said: “Hardy has an unparalleled record of profitability over more than 25 years. Our emphasis is on profit not volume and our rigorous approach to pricing and margins means that the Syndicate has continued to be extremely selective in the business written.
“The broader composite account that we have developed gives us a strong base from which to continue our proven ability in providing significant returns to shareholders throughout the insurance cycle.”
