Omega Insurance Holdings sees further US progress after lifting first-half pre-tax profits 20 per cent to $24.5 million (£13.9 million).

Quoted on AIM and domiciled in Bermuda, the company, which operates Omega Specialty in Bermuda and Omega US in Chicago and supports the £250 million Lloyd’s Syndicate 958, increased gross written premiums seven per cent to $186 million (£105.5 million) in the six months to June. Earnings rose 36 per cent to 15 cents (8.5p) a share and the interim dividend rises from 7.7 cents to 10.3 cents (5.8p) a share.

Against an overall background of still weakening insurance premiums virtually across the board, Omega describes an increase from 81.6 per cent to 83.7 per cent in the ratio of claims and expenses to income as ‘very satisfactory’, given the flood and tornado damage which afflicted the US South and Mid-west – ‘the core of Omega’s business’. Chief executive officer Richard Tolliday says the company has grown its business in the USA, focusing as before on smaller business clients, where he argues relationships and service are more important in winning and keeping accounts than the cut-throat price competition prevailing at the larger end of the business.

Omega has increased its Bermuda reinsurance business (benefiting from a low-tax regime) significantly, but Syndicate 958 has been reducing its underwriting in the face of continuing premium rate weakness in the Lloyd’s market. The company’s investment side sold out of US Fannie Mae and Freddie Mac bonds in December.

Tolliday sees further expansion in medium to small ticket business in the USA and in reinsurance and quota share business. He does not expect Hurricanes Gustav and Ike to make a big impact on premiums and, recalling past abortive merger talks, says ‘we are very happy to be an independent business’.

Omega shares have swung between 172.5p and 137p this year and now trade at 153p, up 4.5p this morning, where they value the company at £226 million. They should fare better than some sector peers.

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Omega Insurance Holdings	AIM	£234.04m	158.50p	0.00p
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