Unlike bigger rivals battered by severe weather claims, Independent expanded its business - measured by net earned premium - by 14 per cent to pounds 392.7m. The shares jumped 12 per cent yesterday to 280p, a return to favour after an autumn profits warning which saw the price drop 12 per cent.
Shareholders were taken aback by the November warning. A pounds 15m hit for weather damage claims in the autumn was unexpected, and the group also recorded a pounds 5m charge for an abortive diversification into life insurance. Most analysts yesterday upgraded their recommendations from "neutral" to "buy" as it emerged that the reaction to November's profits warning had been overdone.
Brighter prospects in general insurance, caused by a determined hike in premium rates by the large insurers, also helped the stock.
Michael Bright, the chief executive, has won plaudits for positioning Independent as a "contracyclical company" that bucks trends set by other insurers. The insurer was founded in 1986 as part of a buy-in backed by 3i and Foreign & Colonial. Mr Bright exited its personal lines business and concentrated on adding value, rather than cutting premiums, for commercial customers.
The company has withdrawn from price-driven commodity business, and won a loyal customer base by offering services such as risk management and health and safety to commercial insurance buyers.
This "partnership approach" has helped the accuracy of Independent's underwriting. It has increased premiums from pounds 26m 12 years ago to pounds 550m.
Mr Bright yesterday bought half a million shares, stressing his confidence. More than 300 employees are now in a position to cash in shares bought as part of a "Share Save" scheme, splitting pounds 8m between them.