Hampden Underwriting posted a pre-tax profit of £128,000 in 2010, falling from £985,000 in 2009.
The company, which provides investors with a limited liability direct investment into the Lloyd's market, reported 2010 gross written premiums of £7.9m, compared to £8.6m in 2009.
Hampden said its book was hit by losses in the UK motor market and the Chilean earthquake.
Chairman Sir Michael Oliver said 2010 was “frustrating” noting the company’s “extremely volatile” share prince.
“One way of addressing the [share price] problem is growth, with more shares in issue held by a broader shareholder base,” he said in a statement to shareholders.
“Last year we pursued two opportunities which would have had a transformational effect on the size of the Company. Sadly both fell at the final fence much to the disappointment of the board. Rest assured however, our appetite for growth remains undiminished and we continue to evaluate other opportunities as they arise.”
He added that the company, which began underwriting in 2008, had also hoped to pay its first dividend, but said the impact of catastrophe losses in the first quarter of this year on its portfolio was still unclear, in particular the 2010 account.
“[The board] debated long and hard but finally came to the conclusion that in view of this uncertainty, it would be imprudent to pay a dividend now,” he said. “It was not a decision taken lightly and, as and when the market gets a better feel for the likely impact of these catastrophic events, it is certainly one that we will revisit.”
Hampden said it expects its 2010 account to move into loss due to the number of major losses. “Although at this stage, given the account is still on risk and the Japanese earthquake loss is subject to material uncertainty, we are not providing a formal estimate,” it added.
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