(Adds background, CEO comment from statement)
Feb 10 (Reuters) - Insurer Lancashire on Wednesday posted a surprise profit for 2020 as a recovery in its investment portfolio offset nearly $150 million in losses linked to the COVID-19 crisis and natural catastrophes.
Pretax profit for the UK-listed company collapsed to $5.9 million for the 12 months ended Dec. 31 from $119.5 million last year, but exceeded analyst expectations of a $16 million loss, according to Eikon data from Refinitiv.
Lancashire, which underwrites property, energy and aviation lines, said its investment portfolio generated returns of 3.9% in the period, rebounding from market volatility earlier in 2020.
“The COVID-19 pandemic has impacted the whole insurance industry as a loss event,” Chief Executive Alex Maloney said.
“I am pleased that Lancashire’s approach to reserving for COVID-19 losses has remained consistent throughout the year, albeit uncertainty still remains as this is an ongoing event.”
Lancashire, part of the oldest insurance market in the world, has also been benefiting from a growth in rates across its business lines, which helped push its gross written premiums up by 15.2% to $814.1 million.
Its combined ratio, which indicates underwriting profitability, was 107.8% versus 80.9% last year. A level below 100% indicates that premiums earned exceeded claims.
Reporting by Muvija M in Bengaluru; Editing by Devika Syamnath