Insurance market pricing has dropped off after peaking in January, Lancashire Holdings’ chief executive officer said.

The Bermudian-based company reported a pre-tax profit of $32.5 million for the second quarter, down from $38 million in the corresponding period last year.

Alex Maloney, Lancashire’s CEO, said: “Our earlier predictions of how the insurance market would respond following the 2017 loss events are proving to be accurate.

“Pricing peaked at the January renewals and we are now experiencing a decline from those levels, although we remain in positive territory for the year to date. We have still been able to take advantage of rate increases across most of our lines of business.”

Gross premiums written fell 4.3 per cent in the second quarter to $176.7 million, but Mr Maloney said the rate increases and growth attained by the company had been masked by the timing of renewals of multiyear deals.

Lancashire’s combined ratio, the proportion of premium dollars spent on claims and expenses, was 69.2 per cent for the second quarter, in line with last year’s 69.8 per cent.

Last year’s huge catastrophe losses, related to events including hurricanes Harvey, Irma and Maria, earthquakes and wildfires, racked up some hefty claims, but Mr Maloney believes there is still too much money in the market.

“We will watch this year’s wind season with interest,” Mr Maloney said. “While we believe that there is still too much capital in the market, another year of losses may serve to dampen appetites.

“We are witnessing some of our competitors exiting unprofitable lines of business and Lloyd’s is also beginning to take action on underperforming syndicates and lines of business. Time will tell what impact this will have on the market.”

Lancashire’s total investment return was 0.5 per cent in a volatile three months which included a US interest-rate rise.

The company’s return on equity was 2.9 per cent for the quarter and 5.9 per cent for the first six months of the year.