Lancashire beats expectations

21st Feb 2011 15:32

Insurance underwriter Lancashire reported a much better that expected pre-tax profit. The profit of $339m compared with a consensus figure of $265m.The combined ratio is 55%,which is likely to be one of the best in the sector. There was a $25m loss relating to BP's Deepwater Horizon, while the cost of the Chile earthquakes was $84.7m. Lancashire reported an increase in annual gross premiums written although there was a decline in the fourth quarter as the company is careful about what it is underwriting as premium rates decline. Gross premiums written in 2010 rose to $689.1m, against $627.8m. A final dividend of 10 cents a share was announced. Lancashire has already paid a special dividend of $1.50 a share and an interim of 5 cents a share.