Lancashire profits miss forecasts in first quarter

1st May 2014 10:41

Insurance group Lancashire Holdings saw a strong increase in gross premiums written in the first quarter and reported an absence of major losses, but profits slipped year-on-year.Nevertheless, the company said that, barring any change in trading conditions, it will return a "substantial portion" of profits to shareholders later this year.Gross premiums written during the first three months of 2014 totalled $316.7m, up from $214.9m the year before.The combined ratio, a measure of profitability used by insurers that compares premiums with losses, worsened to 66.4% from 51.2% the year before but was significantly better than the 70% level in the fourth quarter of 2013 which was affected by a late reported energy claim. The consensus forecast was for a worse combined ratio of 71.3%.However, profit before tax weakened to $57.4m, from $78.9m in the first quarter the year before, below analysts' estimates for $60m. Operating expenses increased by $10m over the year to $27m."We will continue to monitor market developments over the rest of the year but, with no indication of any change in trading conditions, it is likely that we will return a substantial portion of our earnings later in the year," said Chief Financial Officer Elaine Whelan.The stock was down 2.7% at 681p by 11:12 on Thursday.BC