Lloyds of London-listed insurer Chaucer has announced record results for the first half of the year with pre-tax profits up 80%. However, the company warned that Hurricane Katrina would negatively affect it in the second half to the tune of GBP20 million.
Pre-tax profits in the first six months of the year at the UK insurance provider Chaucer Holdings was GBP35.8 million an impressive 79% increase on the previous corresponding period.
Chaucer’s strong profit growth was delivered through an increase in business and an improvement in its combined ratio as the gap between premium income and claim payout increased. Gross written premium income was up 19% to GBP263.3 million. Chaucer’s combined ratio reached 76.7% which compares favorably to 2004’s figure of 83.1%.
The positive vibe was tempered by the realization of the company’s exposure to Hurricane Katrina. Katrina will cost it GBP20 million before tax in H2, which is more than the company’s pre-tax profits in the second half of last year. However, according to CEO Ewen Gilmour, the initial negative effect of Katrina will be offset in the longer term by around a 10% increase in marine and non-marine premium rates.