(Adds details from statement, comments from CEO and analyst)
July 29 (Reuters) - Lloyd’s of London insurer Lancashire posted a surprise loss for the first half of the year and raised its loss estimate to $42 million from $35 million due to the COVID-19 pandemic.
The property and casualty insurer, which also writes policies for heavy-duty assets such as oil rigs, ships and aircraft, posted pretax loss of $14.7 million for the six months ended June 30 compared with a profit of $68.7 million a year earlier.
The company incurred losses despite a 15% jump in gross written premiums to $495.5 million, boosted by double-digit percentage rate increase in many of its business lines.
Lancashire said the results were affected by the COVID-19 losses, as well as a number of late reported attritional claims from prior years.
“The effects of COVID-19 as a loss event to the insurance and reinsurance markets remain both ongoing and uncertain,” Lancashire Chief Executive Alex Maloney said.
Relative to rival Beazley, Lancashire is still somewhat less vulnerable to the global health crisis due to its lack of exposure to travel, accident and health insurance.
“(H1 results) Large miss driven by reserve increase and small COVID loss increase,” said Credit Suisse analysts.
The company’s investment portfolio was still hammered in the first quarter due to the pandemic-driven market sell-off.
Combined ratio, considered the main gauge of an insurer’s profitability, reached 106.9% from 86.6%. A level below 100% indicates that premiums earned exceeded claims. (Reporting by Muvija M in Bengaluru; Editing by Saumyadeb Chakrabarty and Sherry Jacob-Phillips)