Lancashire Holdings Ltd reported a third-quarter, pre-tax loss of $136.4 million on major catastrophe losses.

But the Bermudian insurer is seeing signs of better pricing and is upbeat on the outlook for 2018.

Lancashire recorded net losses from hurricanes Harvey, Irma and Maria, and Mexican earthquakes, of $165 million, which chief financial officer Elaine Whelan called an “extraordinary level of loss activity”.

“While we have incurred a loss in the quarter and for the year to date, we anticipate an improvement in rates following these events,” Ms Whelan added. “Our outlook for 2018 is more positive than it has been for some time.”

The company’s combined ratio — the proportion of premium dollars spent on claims and expenses — was 213.3 per cent.

The company’s third-quarter return on equity was minus 10.4 per cent.

Lancashire’s aim is to return surplus capital to shareholders by way of a special dividend in relatively quiet years. While there will be no special dividend this year, Lancashire intends to pay out a regular dividend.

Alex Maloney, Lancashire’s chief executive officer, said the billions of dollars lost by the industry as a result of the natural disasters “will have depleted capital and stressed balance sheets across the global insurance sector”.

He was hopeful this would herald better pricing for his company’s products.

“After many years of soft pricing conditions we are at last seeing some evidence of an increase in pricing, particularly in catastrophe-exposed lines,” Mr Maloney said.

“The first major test of the market dynamics will be the year-end insurance and reinsurance renewal round.

“Many product lines will be loss-affected and I would expect to see a return across the sector to more disciplined underwriting standards and pricing which reflects the true risks and exposures.”