Lloyd's specialist 'would rather lose money than drop below target prices'.

Lloyd’s specialist insurer Hardy Underwriting has said it is willing to lose business rather than go below its target prices.

In an interim management statement this week, Hardy said this decision would allow it to cope better with the economic downturn.

It reported £138.6m in gross earned premium for the nine months to 30 September, up from £125.5m in the same period of 2007.

The increase, Hardy said, was down to new business underwritten by Syndicate 3820. The syndicate had core accounts in property classes but was looking to expand its range of speciality lines.

Hardy said it expected to increase underwriting levels by taking up new opportunities with Japanese “kyosai” – or mutual co-operative – accounts and UK high net worth property portfolios.

David Mann, the company’s chairman, said: “Hardy has continued to deliver a strong performance during 2008, despite the extraordinary developments in the financial markets.”

He said there would be a number of opportunities for the company in the next 12 months. “The team is focused on making the most of what could be extremely beneficial market conditions.”

Hardy said it expected a significant increase in rates for most lines of business. It admitted it was disappointed with 2008 airline renewals, but added that property treaty rates were beginning to strengthen and that it expected positive changes to other areas to be driven by the cost of reinsurance from 1 January next year.

It reported that the merger of its syndicates 382 and 3820 was going well.

“We have submitted our final [merger] business plan to Lloyd’s, along with our internal capital assessment, and at present, capacity for 2009 is unchanged at £185m.

“This will, however, be kept under review. Both the business plan and internal capital assessment have been approved by Lloyd’s,” it said.

Hardy’s underwriting platform in Bermuda will begin underwriting third-party risks for Syndicate 382 during the second quarter of 2009.