A boost from Bermuda has helped Omega Insurance Holdings more than double interim pre-tax profits to £10.2 million.

The AIM-quoted insurer, now itself based in Bermuda, hoisted profits 119 per cent to US$20.4 million and increased gross written premiums 113 per cent to $173.1 million in the six months to June, with a combined ratio of expenses and claims to income down from 86 to 82 per cent. Chief executive officer Richard Tolliday says the ‘number one factor’ in the restructured company’s growth was Omega Specialty Insurance, its new Bermudan insurance entity that underwrites similar risks to those covered by Omega’s Lloyd's Syndicate 958.

Tolliday explains that the focus is on ‘unglamourous’ business with smaller companies, especially in the USA, where competition is less than for ‘big ticket’ items. He argues this is insulating Omega from the cyclical softening in premium rates at the top end of the market, claiming ‘many of our lines are at or near their all-time peaks on rating’.

The company, which recruited three key people, Andrew Stapleton, John Curry and Wayne Bates to steer Omega Specialty and the new Omega US arm, is currently also involved in US catastrophe reinsurance. But Tolliday argues the pricing of these risks remains ‘firm’, in contrast to the ‘unattractive’ premiums on non-US reinsurance.

At 153p, up 3p this morning, Omega’s shares should outperform several sector peers.

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