THE Chilean earthquake, Deepwater Horizon oil rig disaster and European windstorm Xynthia conspired to cut interim profits at Chaucer Holdings by 59 per cent to £7m.
Shares in the Lloyd’s of London insurer fell 2.2 per cent to 45p yesterday as it said “an unprecedented level of catastrophes” and a slump in investment performance meant its return on equity fell from 8.6 per cent to 3.1 per cent. The company kept its dividend at 1.3p, but earnings per share dropped from 2.7p to 0.9p.
Chief executive Bob Stuchbery said: “The first half proved to be a difficult underwriting period… although our property and energy divisions still produced credible results.”
Analysts said the numbers were below expectations but highlighted rate increases in half of Chaucer’s underwriting portfolio as a positive. The firm said it was particularly hoping for higher motor insurance rates.
Mark Williamson at KBC Peel Hunt said: “While the results themselves are disappointing, the market is likely to look through this and focus on the rate hardening.”
Eamonn Flanagan at Shore Capital said the next three weeks of hurricane season would be crucial for Chaucer’s fortunes in the second half.