Despite a $59.2m (£39m) loss from the Costa Concordia disaster and a $44.5m hit from Hurricane Sandy, Bermuda-based insurer Lancashire (LRE) still turned out a very profitable underwriting performance last year. The group’s combined ratio of claims to premiums remained steady at a sector-beating 63.9 per cent.
Premium rates are rising solidly, too, with rates up 4 per cent overall during 2012. Lancashire's property retrocession and reinsurance book saw rates rise 20 per cent, while the marine account delivered an 8 per cent rate hike and the offshore energy book boosted rates by 3 per cent. These were offset by the aviation and terrorism accounts, which saw rates fall 7 per cent and 3 per cent, respectively. The investment book, which is entirely focused on cash and safe-looking fixed income securities, managed a 3.1 per cent return - not bad at all in today's low interest rate environment.
Broker Numis Securities expects pre-tax profit of $244m for 2013, giving EPS of 127¢ and net tangible assets (NTA) of 581p (2012: 515p).
LANCASHIRE HOLDINGS (LRE) | ||||
---|---|---|---|---|
ORD PRICE: | 872p | MARKET VALUE: | £1.42bn | |
TOUCH: | 872-874p | 12-MONTH HIGH: | 888p | LOW: 682p |
DIVIDEND YIELD†: | 1.1% | PE RATIO: | 9 | |
NET ASSET VALUE: | 852¢ | COMBINED RATIO: | 63.9% |
Year to 31 Dec | Gross premiums ($m) | Pre-tax profit ($m) | Investment income ($m) | Dividend per share (¢)† |
---|---|---|---|---|
2008 | 638 | 97.6 | 55.0 | nil |
2009 | 628 | 389 | 56.0 | 15.0 |
2010 | 689 | 339 | 53.4 | 15.0 |
2011 | 632 | 219 | 43.2 | 15.0 |
2012 | 724 | 237 | 32.5 | 15.0 |
% change | +15 | +8 | -25 | - |
Ex-div: 20 Mar Payment: 17 Apr †Excludes special dividends: 125¢ in 2009, 140¢ in 2010, 80¢ in 2011 and 195¢ in 2012 £1=$1.53 |