LONDON (Bloomberg) — Bermuda-based Lancashire Holdings Ltd., the property insurer that first sold shares in London in 2005, said profit more than doubled after losses fell 91 percent.

Net income rose to $103 million in the three months to June 30 compared with $42.1 million a year earlier, the insurer said on Wednesday in a statement. Insurance losses fell to $6.5 million from $73.1 million.

"Most of the loss reduction comes from a $35 million release from previous years' reserves, but even stripping out that number losses are still lower than where we were last year," said Joy Ferneyhough, a London-based analyst at Execution Ltd., who has a "buy" rating on the stock. "Lancashire has a very unique, quite nimble and opportunistic business model."

Last year's Hurricanes Ike and Gustav in the Gulf of Mexico were the most costly since Hurricane Katrina devastated New Orleans in 2005, costing insurers $24 billion, according to Swiss Reinsurance Co. In addition, a fire at Universal Studios in Los Angeles cost insurers, including Lancashire, more than $500 million.

The fall in claims "reflects both an unusually low number of losses during the period and favourable development of prior year reserves", Lancashire said in the statement. Lancashire's gross written premiums climbed 23 percent to $242 million in the second quarter on higher demand for property insurance. Sales of hurricane coverage to the energy industry increased nine percent to $88.2 million.

"We have, however, been somewhat surprised by the reduced demand this year for Gulf of Mexico energy hurricane cover," chief executive officer Richard Brindle said.

Lancashire will pay a dividend of five cents a common share for the year to June 30, the first time it's made a payout for the first half.

Chief financial officer Neil McConachie will take on a new role of group president, the insurer said in a separate statement. McConachie will also continue as CFO.