Lancashire’s CEO Maloney Dismisses Value of Merger with Larger Rival

Lancashire Holdings Ltd. Chief Executive Officer Alex Maloney dismissed suggestions the insurer would be better off combining with a larger competitor.

“I don’t really buy the bigger is better thing,” Maloney said on a conference call with analysts Wednesday. “I see no evidence of any of the companies that have got together to be super-companies with a bigger market share on the back of it.”

Maloney’s comments come as the insurer reported a 10 percent drop in first-half profit amid pricing pressure in the Lloyd’s of London market. Lancashire was named by analysts as a takeover candidate after Brit plc and Catlin Group Ltd. both agreed to be bought by larger competitors in the last year.

Lancashire’s shares dropped 4 percent to 644 pence in London Wednesday, giving the insurer a market value of 1.3 billion pounds ($2 billion).

“The whole insurance community will sit and moan about the current market, and it is the worst it’s been in 10 years, but we’re still confident that we can work our way through it,” Maloney said. “We’re much better the way we are.”

Lancashire gained access to the world’s oldest insurance market in 2013 with its takeover of Cathedral Capital Ltd., which provides coverage ranging from terrorism to aviation risks. The acquisition “slightly offset” a decline in premiums across other lines of business, the company said Wednesday.

–With assistance from Sarah Jones in London.