Lancashire halves its ratio

Bermuda reinsurer Lancashire reported lower gross written premiums of $627.8m million ($638.1m) but a combined ratio cut to 44.6% from 86.3% last year, boosting its net operating profit to $364.7m from $119.4m.

Net profit after tax was $385.4m, up from $97.5 last year.

Financial highlights $ (2008 in brackets)

• Gross premiums written 627.8 (638.1)
• Outwards reinsurance premiums 50.7 (63.4)
• Net premiums written 577.1 (574.7)
• Net premiums earned 594.7 (607.3)
• Total net revenue 678.2 (646.6)
• Results of operating activities 396.6 (111.6)
• Profit before tax 388.5 (97.6)

Richard Brindle, group chief executive officer, said: "Lancashire had an excellent 2009. Our performance was largely driven by underwriting, evident in the combined ratios of 25.7% for the fourth quarter and 44.6% for the year.

“Our accident year loss ratios, removing the impact of favourable prior year reserve development, were an excellent 24.0% for the fourth quarter and 27.2% for the year.

“Since we started in business, our weighted average combined ratio is 57.5%, a testament to our most important strategic cornerstone: Underwriting Comes First.

“The outlook for 2010 looks reasonable. The reinsurance market, while modestly off its all-time highs, remains fairly disciplined. As expected, the specialist insurance classes are coming under some pressure, but remain relatively attractive overall.