Lancashire shares drop on 33% fall in premiums

29th Jul 2015 10:44

(ShareCast News) - Insurance company Lancashire Holdings wrote a third fewer insurance premiums in the first half of this year from $635.1m to $423.6m gross written premiums.Shares in the company fell 4.17% to 643p at 1004, following its second half result posted Wednesday.The board declared a dividend of 5c per share, off book value per share at $6.66.Gross written premiums dropped by 43.7% in the second quarter of 2015 compared with the same period of 2014.Lancashire said first half profit before tax was about 10% lower at $88.6m compared with last year's $98.9m.Lancashire said there were sizeable losses offshore energy line to extent that market is around break-even point before we enter Gulf of Mexico windstorm season.Space and aviation markets also took a hit following a series of satellite losses.Shore Capital analyst Eamonn Flanagan said the result was broadly in line with expectations and said further returns were likely.Flanagan reiterated a 'buy' recommendation and said the shares remained attractive.Numis kept a 'hold' rating and target price of 790p, and said it expected a 100% earnings payout to generate a yield of 9.6%."We think Lancashire's strategy of reducing its risk profile through increased reinsurance purchase and defending its core portfolio through leadership added value will preserve shareholder value through the downturn."