LONDON (Bloomberg) - Hardy Underwriting plc., a Lloyd's of London insurer that is moving to Bermuda, said full-year profit rose 12 percent as premiums increased.

Net income gained to £13.6 million ($27.2 million), or 38.4 pence a share, from £12.1 million, or 34.1 pence, a year earlier, the London-based bank said yesterday in a statement. Gross written premiums increased 39 percent to £147.5 million.

"Business is going very well," CEO Barbara Merry said in a telephone interview. "Volumes have held up so far this year."

The company said in December it would move its headquarters to Bermuda to expand its underwriting business to include US property and to help it access more sources of capital. Insurers based in Bermuda, the third-largest reinsurance market in the world, also benefit from lower tax rates.

Hardy raised its dividend one penny to 11 pence for the year, and said it would consider increasing the payout by more than the previous target of an annual 10 percent rise.

"All being well, earnings per share from 2008 onwards will be enhanced and we will be in a position to pay out more," the company said.

Hardy rose seven pence, or 2.6 percent, to £2.77 as of 9.55am in London, bringing its market value to £98 million. It has lost 6.1 percent of its value this year, outperforming the FTSE All-Share Insurance Index, which has fallen 15 percent.