Lancashire's Q3 profits hit by bad weather in Europe

6th Nov 2013 07:44

Lancashire Holdings, the FTSE 250 insurance and reinsurance group, saw profits fall by two-thirds in the third quarter as a quiet wind season in the US was outweighed by losses from hail storms and floods in Europe. Profit before tax in the three months to September 30th totalled just $25.7m, down 67% from the $78m reported the year before.Some $75.6m of claims were made during the quarter, meaning that Lancashire's net loss ratio jumped to 56.4% from 14.6% in the third quarter of 2012.The loss ratio for the first three quarters of the year combined now stands at 34.7%, up from 26% previously, with marine losses from the sinking of the Costa Concordia also having an impact on results earlier in the year. The company's total estimated net loss for the Costa Concordia, after reinsurance and reinstatement premiums, is $96.9m.On a brighter note, the acquisition of the Lloyd's insurer Cathedral Group in the summer, along with significant foreign exchange gains, produced an "exceptional" return on equity (RoE) of 7.4% for the third quarter.Gross premiums written increased by 10.1% year-on-year to $125m, as a big rise in the property market offset falls in energy and marine.The stock was down 3.14% at 793.25p in early trading on Wednesday.BC