Bermuda-based insurer Lancashire Holdings Ltd has reported a pre-tax profit of $54.1 million for the six months June 30, compared to the $23-million loss for the same period in 2020.

The turn-around was fuelled by huge increases in its property and casualty business - a 73 per cent increase in reinsurance gross premiums written and a near 30 per cent increase in insurance.

Lancashire had an underwriting profit of $127.1 million, compared to $39.4 million for the same period a year ago.

Altogether, gross premiums written increased by 40.7 per cent year-on-year to $697.2 million, with a positive renewal price index of 111 per cent.

Net premiums written totalled $427.9 million compared to $282.5 million a year ago.

The combined ratio was 80.7 per cent, improved over 106.9 per cent for the same period a year ago.

The group’s net loss ratio for the first six months of 2021 was 38.4 per cent compared to 57.4 per cent for the same period in 2020.

Lancashire said its net losses recorded in the first half of 2021 for winter storm Uri, including the impact of reinsurance and inward and outwards reinstatement premiums, were $44.8 million and within the previously guided range.

In the first half of 2020, Lancashire said its net losses from the Covid-19 pandemic, including the impact of reinsurance and inward and outwards reinstatement premiums were $41.6 million. The group’s Covid-19 related losses remained stable in the first half of 2021.

The company’s board declared an ordinary interim dividend of five cents per share.

Alex Maloney, group chief executive officer, said: “I am particularly pleased with the group’s strong premium growth of 40.7 per cent in the first half of the year. It has always been our strategy to write more business and deploy more of our capital when market conditions dictate, and these results amply demonstrate our persistent focus on delivering on our strategic aims.”

He added: “My thanks go to our colleagues, who during this last year have demonstrated their ability to work flexibly at home and in the office. We are currently able to operate a flexible working model, with many of our people having returned to a “Covid secure” office environment in both London and Bermuda.

“Looking ahead, we expect the rating environment to remain positive. In addition, the new teams that we have recently hired are expected to contribute to the group’s growth in the future.

“Our continued commitment to underwriting discipline will be central to our success.”

Natalie Kershaw, group chief financial officer, said: “Our overall profits were impacted by one-off costs of $18.7 million due to the successful Tier 2 debt issuance and related refinancing in the period, which has improved the capital efficiency of our balance sheet.

“The investment portfolio remains relatively conservative, with a significant weighting to fixed income assets. As a result, our investment returns, including unrealised gains and losses, were negatively impacted by the yield curve steepening in the first quarter of the year, resulting in a total investment return of 0.3 per cent for the first six months of 2021.

“We started the year in a strong capital position following the successful $340-million equity raise in 2020. This, together with our recent debt refinancing, has enabled us to grow our premium base substantially.

“Given premium pricing is still improving across the majority of our book, we would expect to retain any profits from 2021, over and above the payment of an ordinary dividend, to fund further growth.”