(Reuters) — Lloyd’s of London underwriter Hiscox Ltd. shares jumped to a record high on Monday after it posted forecast-beating first-half pretax profit, though it warned hurricanes could blow it off course in the second half.

The insurer posted pretax profit of $163.6 million, an increase of more than 26%, driven by higher premiums, but said looming hurricanes and slowing premium growth rates could affect it near term.

“It has been a good start to the year, but hurricanes can blow us off course in the second half,” Chairman Robert Childs said.

Hiscox’s stock rose as much as 9.4% to 1,611 pence ($21.11), making it the top percentage gainer on London’s Midcap Index with investors cheered by the results.

“Hiscox was able to successfully take advantage of both rate firming and benign loss experience in 1H18. However, growth momentum is likely to be sustained in retail business while large ticket lines may no longer grow as dynamically,” Barclays analyst Ivan Bokhmat said in a note.

Following record insurance losses of more than $135 billion from hurricanes, earthquakes and wildfires last year, insurers had hoped for higher rates. In the end, however, global property reinsurance prices rose less than expected, with strong competition limiting increases to single-digit percentages.

Hiscox said it had “moved quickly” to capitalize on higher rates and that it would maintain underwriting discipline as rates in big ticket lines flatten.

Falling insurance prices

Hiscox said it was seeing momentum behind rate increases slowing and expects its rate of premium growth to “decline correspondingly.”

“As we went into the second quarter, you saw the price rises stopped happening. And therefore, it might be more subdued particularly in the reinsurance area,” Chief Executive Officer Bronek Masojada told Reuters.

A spate of hurricanes similar to 2017 could push up rates later this year, Mr. Masojada said.

“We always underwrite our business assuming that there will be some hurricanes. And if there are, we are in a good financial position to pay the claims,” he said.

Hiscox has exited its political risk and aviation businesses over the last two years, and Mr. Masojada said rates in marine hull and cargo lines needed to rise.

The underwriter joined rivals Beazley P.L.C. and broker Jardine Lloyd Thompson Group P.L.C. in preparing for Britain potentially crashing out of the European Union without a deal and said that its new subsidiary in Luxembourg would be up and running from Jan. 1, 2019.

Hiscox, which employs 300 people in mainland Europe, has half a dozen people employed in Luxembourg, Mr. Masojada said, adding that the hires were new rather than a transfer of people from London.

“Whatever the politicians decide to do, we hope they obviously have a reasonable agreement, but even if they don’t, we’ve prepared for that.”