Reinsurer Benfield moves into the black

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Benfield told its new shareholders yesterday it had swung back to profitability in the past six months as the re-insurance broker reported its first results since listing this summer.

Its chief executive, Grahame Chilton, or "Chilly" as he was introduced by his chairman John Coldman, said Benfield had made a pre-tax profit of £1.5m, compared with a loss of £2.7m this time last year. After the one-off costs of the float, Benfield's profits rose 68 per cent to £28m.

Benfield, which specialises in passing on risk from direct insurers by finding cover with reinsurers, raised £157m when it listed in June, the biggest initial public offering of the year.

It has enjoyed a buoyant run since then, gaining 15 per cent in the past two months, giving it a market value of £661m. About 900 employees in the company were awarded £22m between them as a reward for working in the business before it became public.

Mr Chilton said premium rates had begun to fall, particularly in property insurance, where rates had come off by 5 per cent in the US and by "double digits" across the rest of the world. Mr Chilton said this should not affect Benfield's results as softening rates encourage clients to reassess their cover and make it easier for Benfield to broker deals. "There is not a correlation between reinsurance rates and our results. A fall in rates can be good news, as it drives demand for our services," he said. Trading margins at the group rose to 29 per cent in the half year from 21 per cent this time last year.

Benfield said it had heard nothing further from the Securities and Exchange Commission in the US. It had been making inquiries in to its US business, EW Blanch, over its accounts and alleged insider dealing. Its shares ended down 9.5p at 287.5p yesterday.