Third-quarter figures from Lancashire Holdings were rosy, with the insurance broker admitting it got off fairly lightly in the Atlantic wind season.
"Lancashire has delivered another solid performance this quarter. The Atlantic wind season threatened serious losses with the US landfall of Hurricane Irene, but a fall in the intensity of the wind speeds resulted in thankfully lower losses to life and property than might have been anticipated," said Richard Brindle, group chief executive officer of Lancashire.
"More importantly, the quarter saw very challenging financial markets, where global uncertainty led to rapid fluctuations in the asset side of our balance sheet. We believe we have taken the appropriate actions to protect our assets through these very difficult times," Brindle said.
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Elaine Whelan, the group's chief financial officer, confirmed that the Lancashire had dumped all of its remaining equity holdings.
Gross premiums written in the third quarter of 2011 rose to $142.9m versus $135.0m the year before, while net premiums written rose to $133.6m from $134.0m the year before.
Profit before tax retreated to $79.0m from $107.6m last year, but that did not stop the board from recommending a special dividend payment of 80 cents, although, in the circumstances, it was understandable that this failed to match the $1.40 special dividend announced with the third-quarter results last year.
Looking at the financial ratios, the total investment return in the quarter was negative, at -0.6%, versus a positive 2.0% return in the third quarter of last year.
The combined ratio, which measures underwriting performance (a lower number is better, and a number above 100% indicates negative return) was 43.5%, versus 39.2%, but well below the level seen in the first six months of the year. The combined ratio for the first nine months of 2011 was 60.7%, down from 65.1% in the corresponding period of last year.
The shares rose 30p to 740p on the day of the results.
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