Insurer Lancashire pays special dividend despite catastrophe losses
Insurer Lancashire is returning $40m (£31m) to shareholders via a $0.20 per share special dividend despite recording a third quarter loss, it said today.
Lancashire warned last month that it could be hit by catastrophe losses of $25m to $45m from recent hurricanes and typhoons.
This led to a negative return on equity (ROE) of 1.9 per cent, which was still an improvement on the same quarter last year when its negative return on equity was 10.4 per cent.
For the quarter its loss before tax was $25.3m, compared to $136.4m in the same quarter last year when it was hit hard by hurricanes such as Harvey and Irma.
For the year-to-date profit before tax was $49.6m and ROE was 3.9 per cent.
Chief executive Alex Maloney said: "The third quarter of 2018 was at least as active as 2017 in terms of the number of events to impact the industry. The magnitude of insured loss, however, has been much smaller. We have, nonetheless, produced a small loss for the quarter as a result of these events.
“While it's always disappointing to lose money in any quarter, we remain in positive territory for the year to date. The loss events during the quarter are a well understood part of our business model; we are prepared for such events and they lie within our risk expectations.”
Lancashire said it was returning capital to shareholders via a special dividend as it does not anticipate needing any more capital for its reinsurance business.