Lancashire Holdings Ltd’s net operating profit rose to $40.5 million, or 20 cents per share, in the first quarter, up from $25.2 million, or 13 cents per share, year-on-year.

The Bermudian-based insurer and reinsurer’s profit after tax was $42.2 million.

Gross premiums written were $215.8 million, up from 196.5 million, while the company’s combined ratio improved to 65.2 per cent, down from 85.6 per cent.

Alex Maloney, chief executive officer, was pleased with the 2.9 per cent return on equity for the quarter, and said there was an improved rating environment following the major catastrophe losses of 2017. However, he said that although rates were moving in the right direction “the rates have not yet improved enough to warrant a material increase in the Group’s level of overall risk which currently remains broadly similar to that of 2017”.

Mr Maloney added: “The energy sector is starting to show the first green shoots of recovery thanks to a more sustained period of stable oil prices. This should help bring demand, and therefore premium, back to the energy insurance market through 2018 and into 2019; the Group is very well placed to benefit from this should recovery in the sector continue.”

Market volatility and a Federal Reserve rate increase in March were factors in a loss of 14 basis points in Lancashire’s investment portfolio. Elaine Whelan, chief financial officer, said: “Our risk assets, short duration and interest rate hedging protected the portfolio from further downside and, while we expect further interest rate increases this year, we will obviously benefit from the higher rates going forward.”