Firm says it was able to protect itself from "the worst of the crisis"
Hardy’s share price leapt 10% this week to 298p after it announced a 54% leap in gross written premium to £149.9m for the first half of 2009 from the £97m of last year. GWP was up in most lines except for marine and aviation business, which slid to £47.9m from the £49.4m of 2008.
However, pre-tax profits were down to £7.8m from last year’s £8.7m.
Chief executive Barbara Merry said that volatile currency movements were the only reason for the dip. “We are not immune from the continued uncertainty in financial markets and, in particular, volatility in major currencies.
“The pre-tax result of £18.7m, excluding the effect of foreign exchange movements, is testimony to our continued focus on underwriting discipline. Furthermore, our net tangible assets are intact and growing, despite the short-term dilutive effect of the capital raising.”
Merry admitted there were still areas of risk that the group would keep an eye on. The reinsurance treaty account had yet to be tested as the industry headed toward the hurricane season.
Hardy would also not be immune to any claims resulting from the financial crisis. “We are wary of anything that is a systemic risk and, with foresight, we have been able to protect ourselves from the worst of the crisis. But there is no doubt that whilst the majority of losses on the financial institutions book will emerge on the D&O liability part
of the book, which we don't underwrite, there is also a high incidence of employee fraud, which is covered under the direct financial loss that we do underwrite.”
Merry said there were clear signs of recovery in the insurance industry. “The rating increases across several of our major classes of business … are very encouraging.”