The insurer Hiscox, best known for policies covering fine art, kidnapping and natural disasters, played down concerns that a strong hurricane season in the US would knock its profits in the second half of the year after it revealed record results in the first six months.
The company said strong trading conditions offset the impact of the weak dollar and European weather claims. It also said that Hurricane Dean, which has buffeted Jamaica and is heading towards Mexico, should not cost the firm too much, providing it maintains it current path and steers clear of Florida and the Gulf of Mexico.
It said pre-tax profit in the six months to the end of June was £106m, up 72% on a year earlier.
The firm, which decamped to Bermuda last year to avoid corporation tax along with two other Lloyd's underwriters, said the strong results were driven by its global markets division, which saw pretax profit surge to £87m from £22m during the same period last year thanks to healthy returns from its catastrophe insurance and reinsurance market.
The chairman, Robert Hiscox, said: "We've grown well, all systems are firing, and it's a good profit."
Gerald Farr, a Seymour Pierce analyst, said: "Overall, a very good set of results which shows that the Lloyd's market, despite falling rates and a weak US dollar, is in fine fettle."
Hiscox shares, which lost nearly 11% of their value between July 17 and Friday's close due to turmoil caused by the sub-prime crisis, rose strongly to finish the day at 280p. The outlook remained rosy, it said, despite estimates that floods in Britain in July would cost it £20m in the second half. Investment income was up to £48m and it said it had almost no exposure to the US sub-prime mortgages debacle which has cost several investment banks billions of dollars in losses.
Hiscox said the insurer intended to pay a dividend of 12p for 2007, though it would consider returning any excess capital it may have at the end of the year.