Re/insurer Hardy Underwriting Bermuda Ltd. said yesterday that first-half pretax profit declined 90 percent to £0.8 million ($1.3 million).

The company was hit by around $80 million in losses from two first-quarter catastrophes — the earthquake in Chile and hailstorms in Australia.

Hardy, which relocated its holding company to Bermuda in 2008 and opened a property catastrophe reinsurance underwriting platform on the Island last year, wrote four percent more business in the first half of 2010 than the same period last year.

Gross written premiums totalled £155.9 million, compared to £149.9 million in the prior year period. This marked a slowdown in growth after the company saw an increase of 41 percent in gross premiums last year.

Chief executive officer Barbara Merry said: "The resilience of the Hardy business model is evidenced by the fact that, in such testing times, we have reported a profit and have increased net tangible assets.

"There is a renewed energy within the team to take Hardy to the next level, retaining our traditional values but incorporating the additional skills necessary to attract and retain good quality business. Our long term track record reinforces our conviction and confidence about the business going forward."

Ms Merry said Hardy was sticking to its original loss estimate for the Chile earthquake of between $40 million and $60 million from the property treaty book with a $7.5 million gross loss estimate for direct and facultative risks, adding that some clients had not yet quantified their losses.

"For now, therefore, we are maintaining the estimated loss range for the treaty portfolio, but we believe that the overall trend indicates that the loss should fall closer to the lower end of that range," Ms Merry said.

Hardy incurred losses of A$34.6 million (US$31.6 million) from the hailstorms in Australia.

The group's combined ratio — the percentage of premium dollars spent on claims and expenses — was 101.7 percent for the first six months, compared to 71.4 percent in the same period in 2009.

Basic earnings per share were 3.8 pence compared to 15.1 pence in 2009.

The London-listed insurer declared an increased interim dividend of 4.4 pence per share, up from four pence last year.

In its interim report, Hardy said its Bermuda underwriting platform had expanded this year to include direct and facultative property risks. Ms Merry said the Bermuda unit was "building its footprint on a measured basis".

The company said its joint venture in Bahrain was becoming well established, while Hardy also plans to open a Singapore office later this year with Richard Lim at the helm.

Hardy also named two non-executive directors to its board that are well known names in the Bermuda market, Montpelier Re chairman Anthony Taylor and former XL Group chief of staff Fiona Luck.