Insurance and reinsurance company Lancashire Holdings yesterday posted after-tax profits of $54.4 million for the last quarter of 2015.

The figure takes the profits for the full year to more than $181 million.

The quarterly profit is down $32.4 million on the same period the previous year, while the annual earnings are $48.2 million less than 2014.

Alex Maloney, Lancashire’s chief executive officer, said: “Within the context of one of the most difficult trading environments during the last 20 years, I am pleased to be able to announce what is an excellent set of results.”

Mr Maloney said the return on equity was 3.5 per cent for the fourth quarter and 13.5 per cent for the full year.

He added: “As a business, we pride ourselves on our underwriting expertise and our ability to react nimbly to the challenges of the market so as to moderate our risk appetite and adjust our capital base to provide a good risk-adjusted return to our shareholders.”

Last year saw plunging oil prices, which hit the energy sector, as well as volatile investment markets.

Mr Maloney said: “Neither of these aspects of the world economy seem likely to stabilise in the near future.

“Furthermore, the over-accumulation of capital has continued to generate downward pressure on the pricing of insurance and reinsurance risk over an extended period.”

He added that had contributed to the rash of mergers and acquisitions in the industry as larger and more complex companies attempted to rationalise back office costs and achieve capital efficiencies.

Mr Maloney said: “Lancashire is not immune to the pressures faced by the market, but our strategic approach is distinctive because, rather than seeking top line premium growth, our focus continues to be on remaining relevant to our clients and brokers.”

The news came as Lancashire announced that Martin Thomas, chairman of the Lancashire board since 2007 and a director for nine years, is to step down from both roles after the firm’s annual general meeting in May.

Peter Clarke, also a director of the firm, will take over as chairman.

Mr Clarke joined the Lancashire board two years ago as an independent non-executive director after having been CEO of the Man Group.

Lancashire wrote gross premiums of $97.1 million in the last quarter of 2016, compared to $120.4 million in the same quarter the previous year.

Gross premiums written for the year totalled $641.1 million, down $266.5 million on the $907.6 million recorded at year end in 2014.