Helicopter insurer quadruples profits

Hardy Underwriting, the Lloyd's of London insurer that specialises in covering helicopters, said yesterday its first- half profit almost quadrupled after premium rates soared.

Peter Hardy, chairman, was confident that next year will continue to provide good trading conditions for the company. "We are experiencing the good times now and are trying to make the absolute best of them," Mr Hardy said, adding that the financial position of the Lloyd's market "looks stronger than ever". He added: "We believe that underwriting conditions in 2004 will continue to present us with opportunities although rates are flattening in some areas."

The company, which raised £25m last year to double its underwriting capacity, said it had written 50 per cent more in premiums in the first six months of 2003. This helped lift its half-year profits to £6.4m from £1.8m in 2002.

Mr Hardy was able to gloat that "unlike some of our competitors, who are in need of reserve strengthening", his company had underwritten prudently.

Because of tight underwriting and a low number of claims, it took a release from its over-cautious reserves of £524,000 in the period.

This contrasts sharply with the position of Goshawk, for example, a rival Lloyd's vehicle, which saw its shares halve earlier this month after revealing it would have to increase its reserves and may breach its banking covenants.

The good underwriting profits have led to a very low combined ratio at Hardy's. This measures the size of claims as a percentage of the premiums the company collects, and it fell to 79.8 per cent from 91.2 per cent last year - a figure Mr Hardy described as "remarkable". It shows not only improved underwriting but very low claims experience, which Mr Hardy said yesterday could not be taken for granted.

"We must expect to pay some claims as that is what we are here for," Mr Hardy said, adding that it would be "unrealistic to assume that this superior performance can continue indefinitely".

The company also revealed that it had made strong gains from its investment portfolio, banking £3m in this six-month period compared with just £192,000 this time last year.

A significant part of the gain came from a substantial investment in the rival insurer, Atrium, on which Hardy made a gain of £1.8m.

Shares in Hardy closed down 0.5p at 255p yesterday, valuing the company at about £90m. The stock has risen 16 per cent this year.