Lancashire Holdings saw its profit almost halved to $28.3 million in the first quarter.

However, the company kept its combined ratio steady at 72.7 per cent, only a fraction higher than the same period last year.

Price reductions on renewals in January and April were evident in all classes, but particularly the energy sector where renewal prices were 86 per cent of those achieved in the first three months of 2015.

Elaine Whelan, the group’s chief financial officer, said the price reductions “were broadly in line with our expectations on both the inwards and the outwards books”

She added: “Although the market continues to be challenging, we remain well able to maintain our core portfolio. However, absent a market-changing event, there is no reason to believe pricing will improve in the near term, and it is therefore more likely that we’ll return capital than retain it later in the year.”

Lancashire Holdings’s gross premiums written were $230.8 million for the quarter, down from $244.3 million. The group’s profit after tax dipped $25.4 million, while its net operating profit dropped to $32.4 million from $52.1 million.

Alex Maloney, chief executive officer, referred to the group’s return on equity of 3.8 per cent as “strong”. He added: “I am pleased that we have managed to defend our core book of business, with premium income at a similar level to a year ago.

“In what remains a very tough underwriting environment, brokers are looking for quality of service and security and are increasingly tiering the insurance market on that basis.

“Whether in Bermuda, London or at Lloyd’s, our Group platforms are valued for their ability to provide excellent client service in those lines in which we specialise, and we are fortunately seeing opportunities not only to maintain but also to build our participation on some of our core books of business. This has helped insulate our business from some of the chillier blasts faced by the smaller following markets.”

Lancashire’s total investment return, including internal foreign exchange hedges, was 0.7 per cent for the quarter, compares with 1 per cent a year ago.

Within the Lancashire group are Bermudian-based Lancashire Insurance Company and Kinesis Capital Management, together with Lancashire Insurance Company (UK), and Lloyd’s member Cathedral Underwriting Limited.