Lancashire Holdings disappoints with full year results

13th Feb 2014 08:49

- Revenue up, but higher insurance losses hit profit- Special divi payment of 20 cents- Gross and net premiums declineShares in specialty insurance group Lancashire Holdings sank on Thursday as the group revealed that the combination of a number of energy losses and developments, the European hail and flood events, and adverse developments on the Costa Concordia maritime loss had resulted in a full-year profit reduction.In the 12 months ended December 31st, the group recorded a pre-tax profit of $218.1m, down from $236.8m a year earlier. Total net revenue for the period rose to $642.6m from $639.6m in 2012, but was offset by higher net insurance losses and expenses. Diluted earnings per share fell to $1.17, from $1.29 a year earlier. Despite this, the group announced a special dividend of $0.20 a share, which it said was a reflection of the progress made on the re-structuring of its capital base and the re-balancing of its capital requirements. Gross written premiums for the year declined to $679.7m (2012: $724.3m), while net written premuims dropped to $557.6m (2012: $576.1m). Notably, the total investment return dropped to 0.3% from 3.1% year-on-year, while the net loss ration rose from 29.9% to 33.1%. Group Chief Executive Officer Richard Brindle said: "There is a lot of gloom about the state of the market [but ...] we don't share the gloomy outlook. "With our three platforms comprising our permanent reinsurance asset management business in Kinesis, our top-performing Lloyd's business in Cathedral and our leading specialist insurance and reinsurance businesses in Lancashire, together with our sound business model and outstanding team, we believe that we can navigate a course through this market, and indeed the next hard market when that comes."At the period end, the group's total available capital was $1.79bn, up from $1.65bn a year earlier. The share price fell 4.93% to 717.78p by 09:30 on Thursday. NR