Reinsurance is struggling with too much capacity, Lancashire Holdings CEO Alex Maloney said yesterday.

“This is driving competition on both price and terms and conditions,” he added.

He was speaking as the firm released its 2014 last quarter and full year results, which listed after tax profits for the last three months of the year at $86.8 million and $229.3 million for the full year — up on the same figures for 2013.

Mr Maloney said: “But our focus on employing lead underwriters with the ability to work with clients and brokers to design programmes and supply meaningful capacity protects us from the pressures on the smaller following markets who cannot fulfil these requirements.

“We did see some pressure on signings throughout the year, but on our core books we maintained, and even in some cases added to, our share of the risks we really like.

“And so we thank our business partners in broking houses large and small, and the core clients we work with year after year for their support, and pledge our continuing support to them.”

Mr Maloney added the firm had also built new specialist teams in energy, terrorism and aviation lines.

Elaine Wheelan, the group’s chief financial officer, said Lancashire’s performance meant the firm was offering a 50 cents per share top up dividend to add to the last quarter’s.

She added: “Combined with dividend equivalent payments, that results in a capital return of $103.0 million.

“Together with the special dividend declared in November, plus the interim and final dividends for this financial year, we have returned 167.8 per cent of comprehensive income for the year. Including all forms of capital returns, from inception we have returned 101.9 per cent of comprehensive income.”

The firm wrote a total of $120.1 million in gross premiums in the final quarter of 2014 — down by around $10 million on the same period the previous year and which took the figure for 2014 to $907.6 million.

Mr Maloney said: “We enter 2015 with historically low retained risk levels, without having had to sacrifice any meaningful share of our inwards portfolio, except property retrocession which has been replaced with better margin, less volatile catastrophe business.

“Of course you only get the credit for doing the right thing and reducing net exposure in a soft market if there are losses to prove it, and the last couple of years have been very quiet in terms of major insured events.

“But we are committed to underwriting for profit not volume, and we still have plenty of firepower in Lancashire, Cathedral and Kinesis to take advantage of any market dislocation.”