Lancashire posts first ever quarterly loss
by David Masters
Story link: Lancashire posts first ever quarterly loss
Marine and energy insurer Lancashire Holdings Limited has reported its results for the third quarter, with a net loss of $119.4 million or $0.69 per share.
This is the first ever quarterly loss since the company was set up in 2005, and is compared to a net profit of $105.2 million, or $0.51 per share, in the same period last year.
Pre-tax loss for the quarter was $121.7 million, compared to pre-tax profit of $105.1 million in the third quarter of 2007.
Revenue fell 21% on year to $145.6 million, compared to $184.5 million last year.
Net written premiums fell 14.4% on year largely due to lower gross written premiums.
Lancashire cited Hurricanes Gustav and Ike, and a troubled investment market, as the key reasons for the loss.
Together the hurricanes wiped $150 million from Lancashire’s results for the three months ending 30th September.
In response to the storms Lancashire plans to adjust its pricing for off-shore wind energy insurance to reflect a more conservative attitude to energy risks.
Richard Brindle, chief executive at Lancashire, blamed the company’s first ever quarterly loss on ‘summer hurricanes’ and ‘financial market turmoil’.
He added that whilst the loss will have a short term impact, in the long term it will help the company achieve its aim of a ‘strong return for shareholders’.
Brindle concluded his statement with a stark warning: ‘If the current malaise afflicting all financial markets continues throughout the fourth quarter, we can expect a sea of red ink for the industry’s full year results.’