John Reeve, chairman, said the results were in line with expectations at the start of the year. As well as the pound, he blamed "intensifying competition between underwriters which has led to further falls in premium rates". He described the underlying performance as "satisfactory" and said there had been "encouraging growth in a number of key business segments".
The company said changes in the business mean some of the profits will be shifted into a later part of the year. The currency effect is also greater in the first quarter because a more of the overseas revenues in the group's specialty business fall in that period. Stripping out currency, underlying profits were up 4 per cent on brokerage and fee revenues from continuing operations down 7 per cent at pounds 184m.
But one analyst said: "It wasn't a very upbeat statement", highlighting the "pedestrian underlying progress and fairly mixed trading statement". He suggested analysts were likely to cut their 1997 profit forecasts from around pounds 95m-pounds 98m.