Lancashire Holdings Ltd (LON:LRE) shares pushed higher on Thursday as the property and casualty insurer swung to a profit in 2018 from a loss a year earlier in spite of higher levels of claims activity than average again in the fourth quarter.
The FTSE 250-listed Lloyd's of London insurer reported a pre-tax of US$33.6mln for the year ended December 31, compared with a loss of US$72.9mln a year earlier.
The turnaround came as the group saw its full-year gross written premiums rise by 7.9% to US$638.5mln, and its combined ratio improved to 92.2% from 124.9% last year, indicating an underwriting profit.
Lancashire’s chief executive Alex Maloney said: "The fourth quarter of 2018 once again witnessed higher levels of loss activity than average, with the occurrence of hurricane Michael in October and a further series of catastrophic wildfires in California causing a tragic loss of life.
“When considered with the other major loss events during the year, 2018 ranks amongst the four largest loss years of the last couple of decades.”
Looking ahead, Maloney said he was “encouraged with our new business momentum.”
The CEO added: “Whilst the trading environment remains challenging, there are now some signs of an improved rating environment in many of our speciality lines, which account for over half our business. Encouragingly, the pricing trends remain positive across most of our business lines.”
Illustrating that optimism, Lancashire hiked its full-year dividend payout to US$0.35 per share, up from US$0.15 a year earlier, boosted by the payment of a US$0.20 special dividend.
In early morning trading, Lancashire shares were 2.5% higher at 610p.