Lancashire Holdings has posted after-tax profits of $38.2 million for the second quarter.

The figure was up $6.7 million on the $31.5 million logged for the same quarter in 2016.

The return on equity for the Bermudian-based insurer and reinsurer was unchanged at 3.2 per cent quarter on quarter.

Alex Maloney, Lancashire Group CEO, said: “In the current continuing soft market I am very pleased with the return on equity for the second quarter of 3.2 per cent and 5.9 per cent for the half year.

“Premium rating pressure continues in the market. There is evidence from the insurance industry that many insurance classes are operating at marginal levels of profitability at best.

“The dynamics of the loss environment cannot be accurately predicted in the short term, but it is evident that so far in 2017, there has been a lower level of catastrophe losses than occurred in the first half of 2016, while there has continued to be an active run of risk losses in the market.”

Lancashire recorded $184.7 million in gross premiums written for the quarter, down $15.1 million on the second quarter of 2016.

Mr Maloney said that the industry had gone through further rationalisation through cost-cutting and a continued drive to mergers and acquisitions.

He added: “Lancashire continues to respond to the pressure of the market by maintaining our underwriting excellence and discipline and keeping our overheads under control.

“Global headcount is around 200 and that gives us the size to retain some of the best underwriting talent while not having an infrastructure of such size and complexity as to require our business to ‘feed the beast’ through imprudent top line growth.”

Mr Maloney said: “I believe we are well positioned as we enter the wind season to provide solid risk-adjusted returns in what is a difficult market.

“Outwards reinsurance remains attractively priced and as a group we have purchased more reinsurance protection for hurricane risk than in previous years.

“We will review our capital needs following the wind season, whether that be to take advantage of underwriting opportunities or to return capital to our stakeholders.”

The company recorded 19 cents in diluted earnings per share for the second quarter, three cents up on the 16 cents for the second quarter of 2016.

Elaine Wheelan, group chief financial officer, added: “With our risk levels at historic lows, if there are no major events over the coming wind season and no change in market conditions, we anticipate returning earnings to our shareholders later in the year.

“As ever, the balance of capital we hold will match the underwriting opportunities we see.”