New Bermuda insurer Lancashire Holdings Ltd., formed in late 2005 to take advantage of an expected rise in reinsurance rates after last year?s spate of costly hurricanes, said in a trading statement yesterday that it is poised to participate in insurance lines where premiums are attracting the highest dollar.

Lancashire said the offshore energy sector has so far proved its biggest opportunity. The company sells insurance as well as reinsurance, or insurance for other insurers, and also reinsures other reinsurers, referred to as retrocessional coverage in industry parlance.

?Pricing and terms in our focus areas have been extremely encouraging,? said chief executive Richard Brindle, and he vowed not to lose sight of underwriting discipline, a mantra for insurers diligent to make sure premium rates are high enough to be profitable in the event of large losses.

?Trading conditions for offshore energy have been significantly better than anticipated and are continuing to improve further as market capacity decreases,? Lancashire said. Premiums for policies on oil rigs and infrastructure in the Gulf of Mexico region pricing have increased by several 100 percent due to a constriction in availability, it added.

Besides energy policies, Lancashire reported swift business in property retrocession and property-catastrophe in ?select areas?. Others have reported steep increases in the pricing of property insurance for hurricane-prone areas, a situation compounded by some insurers reducing the amount of business they are willing to sell in these areas. The size of last year?s losses are making some gun shy. Hurricanes Katrina, Rita and Wilma is expected to leave the sector with a bill as high as $80 billion.

Besides property and energy, Lancashire also sells marine and aviation policies but said these areas were not seeing the same robustness in premium pricing.

?Aviation business is modestly ahead of plan so far, with a major renewal date still to come in the last quarter,? the statement said. And marine pricing has proved ?inconsistent?, it said.

Lancashire forecast gross policy sales through the first half of the year of between $320 and $350 million, and up to $800 million for the full year. The company, which trades on London?s AIM market, originally anticipated $822 million in 2006 business, a number it cites as an ?illustrative projection?.

?The updated premium projections primarily relate to disappointing conditions in marine business where we have declined a high number of submissions together with a slow start in the terrorism class, partially offset by better than expected conditions in offshore energy,? Lancashire said in its statement.

The fledgling company now counts 27 employees and continues to build out its operation, it said.