Lancashire dented by hailstorms

LANCASHIRE Holdings posted a 67 per cent decline in third-quarter profit as the London and Bermuda-based property and casualty insurer recorded lower investment returns and took hefty losses from the hailstorms and floods that devastated parts of Europe in recent months.
By The Newsroom
Published 7th Nov 2013, 00:01 BST

Shares in London-listed Lancashire fell 3 per cent during trading, making the stock the biggest percentage loser on the FTSE-250 index.

The Lloyds of London insurer, which writes policies for heavy-duty assets such as oil rigs, ships and aircraft, said that pricing remained under pressure and that market conditions for 2014 looked stable.

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Pre-tax profit fell to $25.7m in the three months ended September 30 from $78m a year earlier.

Quarterly claims more than tripled to $75.6m.

Severe floods that inundated parts of central Europe in June are set to cost insurers between $3.5bn to $4.5bn, the world’s second biggest reinsurer Swiss Re forecast in July.

Analysis from the reinsurance arm of broker Willis – which has an office in Leeds – estimated that insurers would face paying out a similar amount again after areas of Germany and France were repeatedly pounded by grapefruit-sized hail stones over the summer.

However, Numis reiterated its “hold” rating on stock, saying that the underlying trading environment and potential benefits from Lancashire’s £266m acquisition of Cathedral are set to drive returns in the medium term.

Related topics:LondonLancashireEurope