Bermuda-based insurer Lancashire (LRE) suffered an extra $37.7m (£24.5m) hit from its exposure to last year's Costa Concordia cruise ship disaster - it's total estimated loss from that now stands at $96.9m. But such recent catastrophes as tornadoes in Oklahoma or floods in Canada don't appear to have hurt Lancashire much - even though the half-year combined ratio (of claims to premiums) deteriorated by 6.2 percentage points, it still reached a highly profitable 66.9 per cent.
Premium rates, however, are slipping. Overall, Lancashire's rates fell 2 per cent compared with the same period last year, with rates down 10 per cent in the aviation book and by 3 per cent on the Gulf of Mexico energy account. In fact, only Lancashire's marine account recorded any upward movement - rates there rose 5 per cent. What's more, the group's investment book - which is almost entirely focused on cash and bonds - delivered a 0.6 per cent negative return in the second quarter. That reflects mark-to-market losses from yield increases on the group's book of US and emerging markets debt.
Broker Numis Securities expects full-year pre-tax profit of $232m, giving EPS of 122¢ (from $236.8m and 128¢ in 2012) and net tangible assets of 495.8p.
LANCASHIRE (LRE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 812p | MARKET VALUE: | £1.34bn | |
| TOUCH: | 812-814p | 12-MONTH HIGH: | 867p | LOW: 670p |
| DIVIDEND YIELD: | 1.2%* | PE RATIO: | 8 | |
| NET ASSET VALUE: | 768¢ | COMBINED RATIO: | 66.9% | |
| Half-year to 30 Jun | Gross premiums ($m) | Pretax profit ($m) | Investment return ($m) | Dividend per share (¢) |
|---|---|---|---|---|
| 2012 | 515 | 107 | 17.1 | 5.00 |
| 2013 | 424 | 137 | 12.6 | 5.00* |
| % change | -18 | +28 | -26 | - |
Ex-div: 21 Aug Payment: 25 Sep *Excludes 105¢ special dividend £1=$1.54 | ||||
