Lancashire Holdings yesterday reported a $212.2 million net profit after taxes for 2011 and declared a special dividend to shareholders.The London-based company reported a 80-cent special dividend per share for 2011 as compared to $1.40 the year prior. According to Lancashire, the company’s book value has increased, including dividends, 23 out of 24 quarters since its inception in 2005.The company saw net losses for the floods in Thailand of $25.1 million and $138.5 million in relation to the Tohoku and Christchurch Lytteton earthquakes.Also yesterday, Lancashire estimated its exposure to the Costa Concordia cruise ship loss last month is estimated to be approximately $35 million net of reinsurance and reinstatement premiums, based on an industry loss of $850 million.“2011’s unprecedented major international catastrophe losses made the year one of the most costly ever for the insurance industry,” said Richard Brindle, Group CEO. “These losses occurred against a very uncertain broader business backdrop, with European economic instability and slowing global output causing continuing volatility in the investment markets. These economic factors and the losses severely stressed the business plans and resources of many in the insurance sector.”Elaine Whelan, group CFO added: “With the announcement of our final dividend we will have returned $1.3 billion, or 83.3 percent of comprehensive income generated since our inception in 2005 and 89.5 percent of comprehensive income for the year.Lancashire also reported a 13.4 percent return on equity for 2011 compared to 23.3 percent the year prior. The company wrote less business in 2011 than 2010, writing $632.3 million in gross premiums compared to $689.1 in 2010.“The key to Lancashire’s success remains our unwavering focus on underwriting profitability, executed through our daily underwriting call and supported by the very close working relationships between the underwriting, finance and modelling/actuarial teams,” said Mr Brindle. ”The corollary of this focus on underwriting profit is the active management of capital, exemplified in 2011 by the successful formation and marketing of a retrocession sidecar, Accordion, and the payment in the fourth quarter of yet another special dividend to right-size our resources.”The company’s reported a year-end combined ratio of 63.7 percent for 2011 compared to 54.4 percent in 2010.“As the spate of international property catastrophe losses continued, our underwriting performance also held up well, producing a combined ratio for the quarter and the year of 73.1 percent and 63.7 percent, respectively,” said Ms Whelan.Lancashire has seen slight pricing improvement in certain areas of business, including their property catastrophe lines as well as marine and energy lines.“I am cautiously optimistic about the insurance pricing environment for 2012,” said Mr Brindle. “The outlook is positive in many of our core areas. We saw attractive opportunities in the property retro market in the January 2012 renewal season. Property catastrophe pricing is showing improvement and, while it’s hard to predict how far it will go, we are also seeing improving pricing in our energy and marine books.”