Investment in its new insurance broking business saw Benfield's profits slide by 7% in 2005.
Despite group revenue increasing by nearly 9%, pre-tax profits fell from £57.9m to £53.8m. The group's trading result fell by 26.7% to £63.3m, slightly above market forecasts of £61m.
Benfield chief executive Grahame Chilton said: "As expected, our 2005 result was affected by planned investment in our new insurance broking business, Benfield Corporate Risk, and in further strengthening our core reinsurance business."
The rise in revenue was offset by a 20% increase in costs, mainly due to a recruitment drive and start-up costs at Benfield Corporate Risk.
The group said that it expected its trading result for 2006 to be "at least" similar to the figure achieved in 2004.
Chilton said the broker would be focusing on recruitment rather than acquisition as a way to grow the business.
"As one of the largest brokers in the UK it is difficult to see within the reinsurance area we deal in an opportunity for consolidation at this stage," he told Insurance Times. "We will work instead on hiring and taking on teams to achieve the necessary growth."
Chilton said the broker was recruiting new teams as part of expansion plans for Benfield Corporate Risk, but he did not expect the new insurance broking business to break even this year.