* Says to return most, if not all, earnings to investors
* Pretax profit falls 29 pct, missing market estimates
* To take "negligible" hit from downing of MH17
* Shares rise nearly 6 percent
(Adds analyst comment, Lancashire executive comment, details;
By Richa Naidu
July 24 British property and casualty insurer
Lancashire Holdings Ltd said it planned to return most -
if not all - of its full-year earnings to investors later this
year, taking the sting out its lower-than-expected quarterly
The company's shares rose nearly 6 percent in morning
trading on the London Stock Exchange on Thursday, making them
the top percentage gainer on the FTSE-250 mid cap index.
"If the situation doesn't change ... it would not be
unreasonable to expect to see an announcement of a special
dividend in the next quarter's results," a spokesman said.
Lancashire said in May that it would return most of its
earnings to shareholders later this year. On Thursday, it said
"most, if not all" could be returned.
"Given the recent falls, that's given the shares some
support," Oriel Securities analyst Hari Sivakumaran told
Reuters. Up to Wednesday's close, Lancashire's stock had lost
19.5 percent in the past year.
Lancashire's pretax profit fell about 29 percent to $41.5
million in the second quarter ended June 30, short of the
average analyst estimate of $46.5 million, according to Thomson
"(The profit miss) wasn't that huge, probably wasn't as bad
as some may have feared," Sivakumaran said.
Analysts say that given the nature of the insurance
business, it is difficult to forecast results, particularly for
catastrophe underwriters such as Lancashire, which focuses on
insuring ships, aircraft and oil rigs.
"There were some claims in there. There was a decent-sized
satellite loss, there were some claims from tornadoes in
Nebraska and Iowa ...," Jonny Creagh-Coen, the company's head of
investor relations, told Reuters.
Creagh-Coen said Lancashire had taken a "negligible" loss
from the Malaysia Airlines plane that crashed in
eastern Ukraine last week.
"We have taken a very small hit from our aviation
reinsurance portfolio, very similar to what we would have taken
in the first quarter of this year when, sadly, the other
Malaysian plane went down," Creagh-Coen said.
The insurer paid out about $3 million in claims related to
the Malaysia Airlines plane that disappeared in March.
Lancashire said net premiums earned rose 47 percent to
$186.4 million in the quarter, driven mainly by its acquisition
in late 2013 of Lloyd's of London insurer Cathedral Capital Ltd.
The insurer earned 0.6 percent on its investments, compared
with a loss of 0.6 percent a year earlier.
Lancashire's shares were up 5.8 percent at 640.5 pence at
(Reporting by Richa Naidu; Editing by Ted Kerr)