Lancashire shares drop on 33% fall in premiums
Insurance company Lancashire Holdings wrote a third fewer insurance premiums in the first half of this year from $635.1m to $423.6m gross written premiums.
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Lancashire Holdings Limited
585.00p
16:40 24/04/24
Shares in the company fell 4.17% to 643p at 1004, following its second half result posted Wednesday.
The board declared a dividend of 5c per share, off book value per share at $6.66.
Gross written premiums dropped by 43.7% in the second quarter of 2015 compared with the same period of 2014.
Lancashire said first half profit before tax was about 10% lower at $88.6m compared with last year’s $98.9m.
Lancashire said there were sizeable losses offshore energy line to extent that market is around break-even point before we enter Gulf of Mexico windstorm season.
Space and aviation markets also took a hit following a series of satellite losses.
Shore Capital analyst Eamonn Flanagan said the result was broadly in line with expectations and said further returns were likely.
Flanagan reiterated a ‘buy’ recommendation and said the shares remained attractive.
Numis kept a ‘hold’ rating and target price of 790p, and said it expected a 100% earnings payout to generate a yield of 9.6%.
“We think Lancashire's strategy of reducing its risk profile through increased reinsurance purchase and defending its core portfolio through leadership added value will preserve shareholder value through the downturn.”