Charles Taylor (CTR) reports broad-based strength across its insurance outsourcing operations means it will beat full year expectations when it reports next month.

Chief executive David Marock says better-than-expected performance in the business’s loss adjusting division is the main driver of the profit upgrade. It means Charles Taylor should beat the 20.75p earnings per share currently forecast by analysts for the year to end-December.

CHARLES TAYLOR - Comparison Line Chart (Rebased to first)

Charles Taylor’s loss adjusting unit is commissioned by insurers to estimate the cost of pay-outs on specialty insurance claims, mostly related to shipping. A benign environment in specialty insurance claims over the last 12 months means the unit will still post profit lower than last year’s.

But Marock warns the company’s pension deficit will come in higher than at the half-year stage because of a fall in interest rates. Lower interest rates reduce expected returns on pension assets, resulting in an upward adjustment to the value at which liabilities are carried.

As well as loss-adjusting services, Charles Taylor earns management fees for running pooled insurance funds for industry groups. It runs the Standard Club, which insures around 9% of the world’s shipping fleet, as well as a number of other maritime-related mutual insurance schemes.

Shares trade 2.3% higher at 261p.

Issue Date: 18 Feb 2015