Benfield results affected by weak US dollar

The U.S. dollar’s weakness and the softening of the reinsurance market significantly affected the financial results of the first half of 2007, Benfield Group Limited says.
Benfield said its earlier expectation that reported trading profit for the full year would be at a similar level to that achieved in 2006 was subject to deterioration in exchange rates or in market conditions.
“The adverse impact of these two factors, particularly the further weakening of the dollar, has continued in the second half of the year,” Benfield noted in a posting on its Web site. “Consequently, the board now estimates that reported trading profit for 2007 will be marginally lower than previously indicated, subject to expectations on business streams in the final quarter of 2007 being met.”
The company’s broking operations continue to generate growth on a constant basis, the company announced. The growth is based on significant new business and a sustained increase in demand for property catastrophe reinsurance cover in peak exposure zones. Benfield said it expected the weak dollar would affect the outlook of 2008.
In the absence of significant global reinsurance losses, Benfield said it anticipates further softening of rates over the next twelve months as reinsurance capacity is ample in most markets.
Benfield announced a share buyback and new debt facility designed to enhance the capital structure of the Group.