Lancashire Holdings has seen a large fall in its profit after tax for the first quarter of 2016, down to $28.3 million, compared to $5.7 million in the first quarter of 2015.
The global specialty insurance firm also posted a decrease in its gross written premiums in the quarter, down to $230.8 million, compared with $244.3 million in the first three months of 2015.
Lancashire’s combined ratio was also up slightly to 72.7 percent in the first quarter of the year, compared to 72 percent in the prior-year quarter.
The firm’s return on equity (RoE) was 3.8 percent for the quarter, down from 4.3 percent in the first quarter of 2015.
Its comprehensive income was also down to $41.1 million for the first quarter of 2016, compared with $62.7 million in the first quarter of last year.
Lancashire got the green light to issue up to 15 percent of its share capital on a non-pre-emptive basis at its annual general meeting (AGM) yesterday (May 4), although it said it doesn’t anticipate any need to raise capital.
“The RoE for the first quarter of 3.8 percent is a strong result,” said Alex Maloney, group chief executive officer, said: I am pleased that we have managed to defend our core book of business, with premium income at a similar level to a year ago.
He added: “In what remains a very tough underwriting environment, brokers are looking for quality of service and security and are increasingly tiering the insurance market on that basis.
“Whether in Bermuda, London or at Lloyd's, our group platforms are valued for their ability to provide excellent client service in those lines in which we specialise, and we are fortunately seeing opportunities not only to maintain but also to build our participation on some of our core books of business. This has helped insulate our business from some of the chillier blasts faced by the smaller following markets.”
Elaine Whelan, group chief financial officer, commented: “Price reductions on our January and April renewals were broadly in line with our expectations on both the inwards and the outwards books.
“Although the market continues to be challenging, we remain well able to maintain our core portfolio. However, absent a market changing event, there is no reason to believe pricing will improve in the near term, and it is therefore more likely that we’ll return capital than retain it later in the year.”
Lancashire Holdings, First Quarter 2016 Results, Alex Maloney, Insurance, Bermuda