Lancashire Q2 results soar

Lancashire Holdings saw pre-tax profits more than double to $107.2m in its second quarter with a combined ratio down to just 35.4% on a steep rise in premium income.

Financial highlights (2008 in brackets)

• Gross written premiums $241.9m ($196.7m) First half: $384.7m ($383.4m)
• Net written premiums $238.7m ($182.4m) First half: $337.9m ($324.3m)
• Combined ratio 35.4% (72.3%) First half: 57.9% (66.4%)
• Pre-tax Profits $107.2m ($49.8m) First half: $148.2m ($135.8m)
• Net profit after tax of $106.4m ($51.2) First half: $147.1m ($135.8)

Richard Brindle, group CEO, said: “Our underwriting result was excellent with a combined ratio for the second quarter of 35.4%. Our investments returned 2.4% on an annualised basis; a reasonable result given our conservative philosophy.

“We have, however, been somewhat surprised by the reduced demand this year for Gulf of Mexico energy hurricane cover. This significantly reduced the level of business written by Lancashire in that particular class, as compared to our expectations.

“At the same time, we have made steady progress in building our property catastrophe book in many United States' critical catastrophe zones and expect to become a significant market participant. Despite reduced premium income in the Gulf of Mexico market, Lancashire has seen strong overall premium growth in the quarter.

“We are also pleased with the business written in July at rating levels supporting our decision to hold back capacity earlier in the year.”