Class of 2005 insurer Lancashire Holdings Ltd. yesterday predicted that trading conditions will be "attractive" in 2007 as strong prices for property and energy insurance continue.

But the insurer, formed by a group of Lloyd's of London veteran underwriters after the record 2005 hurricane season, said marine insurance, which accounts for ten percent of its business, has been "disappointing' this year, and is expected to continue into 2007.

Energy and property insurance each account for 40 percent of the company's business.

In energy, the company said rates had been "excellent" due to "the unprecedented risk adjusted pricing for Gulf of Mexico direct insurance" and strong outside the Gulf.

In property, Lancashire said it expected prices to hold firm or modestly increase in 2007 while premiums for terrorism insurance were expected to slowly decline in 2007, assuming that government insurance backstop legislation was extended in the US.

Lancashire said it expected its gross written premium to be between $615 million and $625 million in 2006.

The company raised about $1.03 billion through the sale of stock and other securities in an initial public offering in December. It is traded on the AIM stock exchange in London.

Lancashire said it expected premiums to remain healthy in all classes of business except marine, particularly in catastrophe exposed zones.

"Outside these zones, there may be some modest weakening but pricing is expected but to remain broadly acceptable in most classes," the company said in a statement.

"Overall, the outlook for 2007 trading conditions for Lancashire is attractive."

In the property line, which currently represents approximately 40 percent of Lancashire's total 2006 premium, trading conditions are expected to remain strong.