Hiscox, the FTSE 250 reinsurance group, reported a reduction in pre-tax profit for the year ended December 31st, leading to a significant fall in earnings per share (EPS).
Profit before tax dropped from £211.4m to £17.3m, which the firm said was "a good result considering natural catastrophe losses of £270m", resulting in EPS of 5.5p, down from 47.2p the previous year.
Investment return dropped from 3.6% to 0.9% while return on equity fell from 16.5% to 1.7%.
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The net asset value per share fell from 332.7p to 323.5p year-on-year, but despite this the total dividend per share was increased from 16.5p to 17.0p, in line with the group's policy.
Chairman Robert Hiscox, who is stepping down in 2013, said: "We have made a small profit in an unusually difficult year. Some key rates are rising, we are employing some brilliant talent, we have fledgling businesses poised for growth and profit, and our mature businesses have small market shares and enormous opportunities.
"Although underweight in most loss affected areas, reinsurance was impacted by the many natural catastrophes in 2011. The team took advantage of distressed conditions following the events in the first half to expand their writings at the important mid-year renewals. They have also continued to build their partnerships with third party providers of reinsurance support. The team retains their nerve and are optimistic about 2012.
"2011 was a challenging year for our investments and looking forward we expect investment returns to remain depressed. We are not tempted by the range of products which may offer higher apparent returns but would rather accept what the market has to offer from conventional sources."
The share price fell 0.9% to 406.30p by 13:57.
NR
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