Losses double and bidders desert Omega

INSURER Omega has cancelled its dividend after pre-tax losses doubled to $94.7m (£60m) in 2011, up from $42.9m the year before.

Investors were dismayed that the firm made no mention of a possible takeover in its annual report and its shares – which have already lost half their value in the last year – dropped a further two per cent to 49.25p.

Last year Omega turned down at least three approaches, including an 83p per share bid from rival Canopius.

“The risk remains that the longer this company is allowed to limp on as an independent entity the less there is that will be of value to a third party acquirer,” analysts at Peel Hunt wrote in a note.

“Independent shareholders should take decisive action to secure what little value is left.”

Gross premiums written declined from $356.1m to $304.6m, contributing to a negative return on equity of over 23 per cent.

The entire insurance industry had a tough year following a spate of natural disasters in Japan, New Zealand and Thailand but Omega’s results are worse than most of its Lloyd’s of London rivals.

The firm is one of the smallest operators on the market and only just survived a torrid 2010 during which almost its entire board, including chief executive and chairman, were replaced as part of a bloody boardroom battle.