REG-Lancashire Holdings Ltd: Lancashire Holdings Limited's Half-Year 2025 Results
Yesterday 07:00
LANCASHIRE HOLDINGS LIMITED
STRONG PROFIT AFTER TAX OF $109.2 MILLION DEMONSTRATES INCREASED RESILIENCE
OF THE BUSINESS
6 August 2025
Hamilton, Bermuda
Lancashire Holdings Limited (“Lancashire” or “the Group”) today
announces its results for the six months ended 30 June 2025.
Highlights:
• Gross premiums written increased 5.8% year-on-year to
$1,356.2 million. Insurance revenue increased 8.9% year-on-year to $930.1
million.
• Insurance service result of $155.7 million, discounted
combined ratio of 87.4%, undiscounted combined ratio of 97.8%.
• Profit after tax of $109.2 million, resulting in a
change in DBVS of 7.6%.
• Total investment return of 3.7%, including unrealised
gains and losses.
• 2025 RoE expected to be high-teens, upgraded from
mid-teens, assuming a similar H2 loss environment to 2024.
For the six months ended 30 June 2025 30 June 2024
$m $m
Highlights
Gross premiums written(1) 1,356.2 1,282.2
Insurance revenue 930.1 854.1
Insurance service result 155.7 222.8
Net investment return 108.2 75.2
Profit after tax 109.2 200.8
Financial ratios
Net insurance ratio(1) 78.6% 65.2%
Combined ratio (discounted)(1) 87.4% 73.0%
Combined ratio (undiscounted)(1) 97.8% 82.2%
Total investment return(1) 3.7% 2.3%
Per Share data
Diluted book value per share(1) $6.08 $6.35
Change in diluted book value per share ("ROE")(1 ) 7.6% 14.0%
Dividends per common share paid in the financial year(2) $0.40 $0.65
Diluted earnings per share $0.44 $0.82
1. Please refer to the end of this release for details of how these
Alternative Performance Measures (APMs) are calculated.
2. Includes special dividend of 25 cents per share paid in April 2025 in
respect of the year ended 31 December 2024 financial results.
Alex Maloney, Group Chief Executive Officer, commented
“Lancashire’s performance for the first six months of the year clearly
demonstrates the increased resilience within our business model.
Our strategy to grow at the right time in the cycle means we are better
positioned, across various classes and geographies, than ever before. We have
developed a robust, diversified and capital-efficient underwriting portfolio
that can absorb the impact of significant industry loss events whilst
delivering more predictable returns.
The impact of the wildfires in California in January has been felt across the
sector. Estimated industry insured losses are around $40 billion, making it
one of the costliest wildfire disasters ever recorded. In this context, our
strong profit after tax of $109.2 million and healthy discounted combined
ratio for the period of 87.4% (undiscounted of 97.8%) shows our ability to
deliver attractive returns even in a challenging loss environment.
We have continued to grow our underwriting portfolio in line with the market
opportunity in a disciplined way with gross premiums written increasing 5.8%
year-on-year to $1,356.2 million. Insurance revenue increased 8.9%
year-on-year to $930.1 million, with the Group RPI for the period standing at
96%. Whilst the market has become more competitive, several years of rate
increases and improvement of terms mean most lines remain fundamentally
well-priced and offer opportunities to grow selectively.
Our underwriting performance has been complemented by our investment
portfolio, which returned 3.7% for the period and remains an important
strategic lever for value creation. The relatively conservative, short
duration, portfolio is well-positioned to limit downside risk, which is a
prudent position in volatile markets.
So, overall, we approach the second half of the year with confidence, a very
strong balance sheet and robust capital base, which is able to support growth
and shareholder returns.
We outlined earlier in the year, in a severe loss year with a similar level of
catastrophe and large risk losses as 2024, in addition to the California
wildfires, we would expect to deliver an RoE in the mid-teens for 2025. In
light of our half-year 2025 performance, in the same scenario, we would now
expect to deliver a high teens RoE.
I am pleased to report that during the period, we made an offer for the
remaining capacity on Syndicate 2010 (for the 2026 underwriting year), which
is not already owned by the Group. Acceptances have been received such that
we now have 99.4% of the capacity and an application has been made to
Lloyd’s for permission to effect a minority buy-out in respect of the
remaining capacity.
2025 is our 20th year of operations and I am proud that we remain a healthy,
relevant and strong player in the sector. Our accomplishments during the first
six months of the year have only been made possible by the talented and
committed people that we have across the Lancashire Group, in all functions
and all regions. I would like to thank them all for their hard work,
dedication and support in assisting us in delivering our strategic goals and,
importantly, in deepening our thriving and positive culture.
In an unstable world, both geopolitically and economically, Lancashire
continues to have the vision, resilience, and talent to maintain long and
mutually beneficial relationships with our clients and brokers, and deliver
sustainable returns for our investors.”
Underwriting results
For the six months ended 30 June 2025 30 June 2024
Reinsurance Insurance Total Reinsurance Insurance Total
$m $m $m $m $m $m
Gross premiums written 815.6 540.6 1,356.2 734.6 547.6 1,282.2
RPI 97% 96% 96% 101% 103% 102%
Insurance revenue 450.6 479.5 930.1 407.6 446.5 854.1
Insurance service result 80.4 75.3 155.7 152.0 70.8 222.8
Net insurance ratio 78.3% 78.9% 78.6% 53.3% 77.5% 65.2%
Gross premiums written
Gross premiums written increased by $74.0 million, or 5.8%, during the first
six months of 2025 compared to the equivalent period in 2024. Excluding the
impact of reinstatement premiums, underlying growth in gross premiums written
was 2.5%. In the reinsurance segment, new business growth and premium coming
through from policies bound in prior years resulted in an increase in
casualty, while a higher level of reinstatement premium contributed to the
growth in property. In the insurance segment, new business growth in energy
and marine was more than offset by rate decreases in property and aviation.
The overall RPI for the Group was 96%. Following several years of pricing
increase the market is now more competitive, but in most lines remains
fundamentally well priced. Our underwriting expertise positions us well to
navigate the challenges and opportunities within the current market.
Insurance revenue
Insurance revenue increased by $76.0 million, or 8.9%, for the first six
months of 2025 compared to the same period in 2024. Gross premiums earned, the
key driver of insurance revenue, as a percentage of gross premiums written was
81.9% for the first six months of 2025 compared to 76.9% for the equivalent
period in 2024. Insurance revenue continues to increase at a faster rate than
gross premiums written, reflecting premium earnings from prior underwriting
years where the business saw substantial growth.
Allocation of reinsurance premiums
Allocation of reinsurance premiums decreased by $10.1 million, or 4.7%, during
the first six months of 2025 compared to the same period in 2024. The
allocation of reinsurance premiums as a percentage of insurance revenue for
the Group was 21.9%, compared to 25.0% in the prior period, reflecting
restructuring of the outwards reinsurance programme as the Group seeks to
achieve efficiencies and to benefit from its increasingly diversified
underwriting portfolio.
Net loss environment
During the first six months of 2025, the Group experienced net losses
(undiscounted, excluding reinstatement premiums) from catastrophe, weather and
large loss events totalling $211.2 million. Catastrophe and weather losses
were $172.0 million. California wildfires represent the majority of this
figure and our estimate of losses resulting from this event remains unchanged.
During the first six months of 2025, the Group also experienced net losses
(undiscounted, excluding reinstatement premiums) from large risk events
totalling $39.2 million. None of the large risk event losses were individually
material for the Group.
In comparison, during the first six months of 2024, the Group experienced net
losses (undiscounted, excluding reinstatement premiums) from catastrophe,
weather and large loss events totalling $44.0 million.
Favourable prior accident year loss development for the undiscounted net
movement in loss reserves was $109.1 million during the first six months of
2025. This was primarily due to general IBNR, catastrophe and large loss
reserve releases on the 2024, 2023 and 2021 accident years.
In comparison, the favourable prior accident year undiscounted net movement in
loss reserves during the first six months of 2024 was $34.9 million.
This continues our track record of favourable reserve releases and the Group
remains conservatively reserved at an 85% confidence interval.
Net discounting benefit
The table below shows the total net impact of discounting in respect of both
insurance contracts issued, and reinsurance contracts held, by financial
statement line item.
30 June 2025 30 June 2024
For the six months ended Insurance contracts issued $m Reinsurance contracts held $m Total $m Insurance contracts issued $m Reinsurance contracts held $m Total $m
Initial discount included in insurance service result 102.0 (26.3) 75.7 73.6 (14.6) 59.0
Unwind of discount (50.3) 11.5 (38.8) (47.1) 13.7 (33.4)
Impact of change in assumptions (22.7) 4.8 (17.9) 18.8 (4.4) 14.4
Finance (expense) income (73.0) 16.3 (56.7) (28.3) 9.3 (19.0)
Total net discounting income (expense) 29.0 (10.0) 19.0 45.3 (5.3) 40.0
The total impact of discounting for the first six months of 2025 was a net
benefit of $19.0 million, compared to a net benefit of $40.0 million for the
same period in 2024. The higher net initial discount in 2025 compared to 2024
is primarily due to the continued growth in the Group's underwriting portfolio
and the impact of catastrophe and large losses events contributing to a higher
quantum of initial loss reserves being established.
The discount rate for all of the Group's major currencies has decreased in the
first six months of 2025. This has driven an adverse impact from the change in
discount rate assumptions. The unwind of discount has increased and reflects
the growth in the discount provision over recent years in what has been a
relatively high discount rate environment.
In the first six months of 2024, discount rates increased across all major
currencies creating a positive impact from the change in discount rate
assumptions and a higher overall net benefit from discounting.
Investments
For the six months ended 30 June 2025 $m 30 June 2024 $m
Total net investment return 108.2 75.2
Net investment income, excluding realised and unrealised gains and losses, was
$81.3 million for the first six months of 2025, an increase of 12.4% compared
to the same period in 2024. Total investment return, including net investment
income, net realised gains and losses and net change in unrealised gains and
losses, was $108.2 million for the first six months of 2025 compared to $75.2
million for the same period in 2024.
The investment portfolio generated a total investment return of 3.7% during
the first six months of 2025. The returns were driven by investment income,
benefiting from higher yields in conjunction with higher prices from falling
treasury rates, buffering the slight widening of investment grade credit
spreads. In addition, the non-US dollar portfolios and cash, held for hedging
purposes, benefitted from a weakening US dollar which added 50bps or $15.7
million of investment return. The private investment funds also contributed
strong returns during the period.
For the first six months of 2024, the investment portfolio generated a
positive return of 2.3%.
The managed portfolio was invested as follows:
As at 30 June 2025 $m 31 December 2024 $m
Fixed maturity securities 2,712.2 2,603.8
Managed cash and cash equivalents 270.1 294.4
Private investment funds 275.7 253.1
Hedge funds 5.7 7.9
Other investments (0.1) 0.1
Total 3,263.6 3,159.3
Key investment portfolio statistics for our fixed maturity securities and
managed cash and cash equivalents were:
As at 30 June 2025 31 December 2024
Duration 2.0 years 2.0 years
Credit quality A+ AA-
Book yield 4.8% 4.7%
Market yield 4.7% 5.0%
Other operating expenses
For the six months ended 30 June 2025 $m 30 June 2024 $m
Operating expenses - fixed 103.5 89.3
Operating expenses - variable 19.9 12.3
Total operating expenses 123.4 101.6
Directly attributable expenses allocated to insurance service expenses (59.2) (51.8)
Other operating expenses 64.2 49.8
The most significant driver of the increase in operating expenses for the
first six months of 2025, compared to the same period in 2024, was an increase
in employment expenses. The headcount for the Group was nearly 450 at the end
of June 2025, compared to just over 400 in June 2024. This increase in
headcount, and the underlying growth in the underwriting portfolio, also
continues to drive increases in IT, operational processing and office costs.
In the first six months of 2025, $59.2 million of operating expenses were
considered directly attributable to the fulfillment of insurance contracts
issued, and have therefore been re-allocated to insurance service expenses and
form part of the insurance service result. This compares to $51.8 million for
the same period in 2024, and is reflective of the increase within the Group's
operating expense base.
Capacity offer
On 26 June 2025, Lancashire’s corporate member at Lloyd’s (Cathedral
Capital (1998) Limited (“CC98”)), which provides 79.7% of the syndicate
allocated capacity of syndicate 2010 for the 2025 year of account, made a
formal offer (the “Offer”) to all other members of that syndicate to
acquire their prospective participations relating to syndicate 2010 for the
2026 year of account for a price of 62p in cash per £1 of capacity. The Offer
was made to fulfil an obligation pursuant to Lloyd’s Mandatory Offer Byelaw.
The Offer closed on 25 July 2025 and acceptances had been received such that
CC98 now has 99.4% of allocated capacity on syndicate 2010 for the 2026 year
of account. An application has been made to the Council of Lloyd’s for
permission to effect a minority buy-out in respect of the remaining capacity
on syndicate 2010 not already owned by CC98.
Capital
As at 30 June 2025, total capital available to Lancashire was approximately
$1.9 billion, comprising shareholders’ equity of $1.5 billion and $0.4
billion of long-term debt. Tangible capital was approximately $1.7 billion.
Leverage was 22.8% on total capital and 25.3% on tangible capital. Total
capital and total tangible capital as at 31 December 2024 were $1.9 billion
and $1.7 billion, respectively.
Dividends
On 5 August 2025, Lancashire’s Board of Directors declared an interim
dividend of $0.075 (approximately £0.06) per common share, which will result
in an aggregate payment of approximately $18.0 million. The dividend will be
paid in Pounds Sterling on 15 September 2025 to shareholders of record on 15
August 2025 (the “Record Date”) using the £ / $ spot market exchange rate
at 12 noon BST time on the Record Date.
Financial information
The Unaudited Condensed Interim Consolidated Financial Statements for the six
months ended 30 June 2025 are published on Lancashire’s website at
www.lancashiregroup.com.
Analyst and investor earnings conference call
There will be an analyst and investor conference call on the results at 1pm UK
time / 9am Bermuda time / 8am EDT on Wednesday 6 August 2025. The conference
call will be hosted by Lancashire management.
Participant registration and access information:
Audio conference call access:
https://emportal.ink/44kzsQk
Please register at this link to obtain your personal audio conference pin and
call details.
Webcast access:
https://onlinexperiences.com/Launch/QReg/ShowUUID=31BB3D68-E4C0-435C-BC72-4C66A710B56D
Please use this link to register and access the call via webcast.
A webcast replay facility will be available for 12 months and accessible at:
https://www.lancashiregroup.com/en/investors/results-reports-and-presentations.html
For further information, please contact:
Lancashire Holdings Limited
Christopher Head chris.head@lancashiregroup.com
Jelena Bjelanovic jelena.bjelanovic@lancashiregroup.com
FTI Consulting
Edward Berry Edward.Berry@FTIConsulting.com
Tom Blackwell Tom.Blackwell@FTIConsulting.com
About Lancashire
Lancashire, through its operating subsidiaries, is a provider of global
specialty insurance and reinsurance products. The Group companies carry the
following ratings:
Financial Strength Rating 1 Financial Strength Outlook 1 Long Term Issuer Rating 2
A.M. Best A (Excellent) Stable bbb+
S&P Global Ratings A- Positive BBB
Moody’s A3 Stable Baa2
1. Financial Strength Rating and Financial Strength Outlook apply to
Lancashire Insurance Company Limited and Lancashire Insurance Company (UK)
Limited.
2. Long Term Issuer Rating applies to Lancashire Holdings Limited.
Lancashire Syndicates Limited benefits from Lloyd’s ratings: A.M. Best: A+
(Excellent); S&P Global Ratings: AA- (Very Strong); and Fitch: AA- (Very
Strong).
Lancashire’s common shares trade in the equity shares (commercial companies)
category of the Main Market of the London Stock Exchange under the ticker
symbol LRE. Lancashire has its head office and registered office at Power
House, 7 Par-la-Ville Road, Hamilton HM 11, Bermuda.
The Bermuda Monetary Authority is the Group Supervisor of the Lancashire
Group.
For more information, please visit Lancashire’s website at
www.lancashiregroup.com.
This release contains information, which may be of a price sensitive nature
that Lancashire is making public in a manner consistent with the UK Market
Abuse Regulation and other regulatory obligations. The information was
submitted for publication, through the agency of the contact persons set out
above, at 07:00 BST on 6 August 2025.
Alternative Performance Measures (APMs)
As is common practice within the insurance industry, the Group also utilises
certain non-GAAP measures to evaluate, monitor and manage the business and to
aid users’ understanding of the Group. Management believes that APMs are
important for understanding the Group’s overall results of operations and
may be helpful to investors and other interested parties who may benefit from
having a consistent basis for comparison with other companies within the
industry. However, these measures may not be comparable to similarly labelled
measures used by companies inside or outside the insurance industry. In
addition, the information contained herein should not be viewed as superior
to, or a substitute for, the measures determined in accordance with the
accounting principles used by the Group for its unaudited condensed interim
consolidated financial statements or in accordance with GAAP.
In compliance with the Guidelines on APMs of the European Securities and
Markets Authority and as suggested by the Financial Reporting Council, as
applied by the Financial Conduct Authority, information on APMs which the
Group use is described below. This information has not been audited.
All amounts, excluding share data, ratios, percentages, or where otherwise
stated, are in millions of US dollars.
Net insurance ratio:
Ratio, in per cent, of net insurance expenses to net insurance revenue. Net
insurance expenses represent the insurance service expenses less amounts
recoverable from reinsurers. Net insurance revenue represents insurance
revenue less allocation of reinsurance premium.
For the six months ended 30 June 2025 2024
Insurance service expenses 792.1 472.2
Amounts recoverable from reinsurers (221.3) (54.6)
Net insurance expenses 570.8 417.6
Insurance revenue 930.1 854.1
Allocation of reinsurance premium (203.6) (213.7)
Net insurance revenue 726.5 640.4
Net insurance ratio 78.6% 65.2%
Operating expense ratio:
Ratio, in per cent, of other operating expenses, excluding equity-based
compensation expense, to net insurance revenue.
For the six months ended 30 June 2025 2024
Other operating expenses 64.2 49.8
Net insurance revenue 726.5 640.4
Operating expense ratio 8.8% 7.8%
Combined ratio (discounted):
Ratio, in per cent, of the sum of net insurance expenses plus other operating
expenses to net insurance revenue.
For the six months ended 30 June 2025 2024
Net insurance ratio 78.6% 65.2%
Net operating expense ratio 8.8% 7.8%
Combined ratio (discounted) 87.4% 73.0%
Combined ratio (undiscounted) (KPI):
Ratio, in per cent, of the sum of net insurance expenses plus other operating
expenses to net insurance revenue. This ratio excludes the impact of the
discounting recognised within net insurance expenses.
For the six months ended 30 June 2025 2024
Combined ratio (discounted) 87.4% 73.0%
Discount included in net insurance expenses 75.7 59.0
Net insurance revenue 726.5 640.4
Discounting impact on combined ratio 10.4% 9.2%
Combined ratio (undiscounted) 97.8% 82.2%
Diluted book value per share ('DBVS') attributable to the Group:
Calculated based on the value of the total shareholders’ equity attributable
to the Group, divided by the sum of all shares and dilutive restricted stock
units (as calculated under the treasury method), assuming all are exercised.
As at 30 June 2025 31 December 2024
Shareholders’ equity attributable to the Group 1,513.9 1,493.3
Common voting shares outstanding* 242,008,350 240,584,795
Shares relating to dilutive restricted stock 7,095,276 6,877,762
Fully converted book value denominator 249,103,626 247,462,557
Diluted book value per share $6.08 $6.03
*Common voting shares outstanding comprise issued share capital less amounts
held in trust.
Change in DBVS (KPI):
The internal rate of return of the change in DBVS in the period plus accrued
dividends. Sometimes referred to as RoE.
As at 30 June 2025 31 December 2024
Opening DBVS $6.03 $6.17
Q1 dividend per share $0.25 $0.50
Q2 dividend per share $0.15 $0.15
Q3 dividend per share — $0.075
Q4 dividend per share — $0.75
Closing DBVS $6.08 $6.03
Change in DBVS 7.6% 23.4%
Total investment return (KPI):
Total investment return in percentage terms is calculated by dividing the
total net investment return, excluding interest income on non-managed cash and
cash equivalents, by the investment portfolio net asset value, including
managed cash and cash equivalents, on a daily basis. These daily returns are
then geometrically linked to provide a total return for the period, which
includes the net impact of foreign exchange. The total investment return can
be approximated by dividing the total net investment return, excluding
interest on non-managed cash and cash equivalents, and including net foreign
exchange gains and losses related to investments and managed cash and cash
equivalents, by the average portfolio net asset value, including managed cash
and cash equivalents.
For the six months ended 30 June 2025 2024
Net investment return 108.2 75.2
Less interest income on non-managed cash and cash equivalents (7.6) (7.2)
Net foreign exchange gains / (losses) related to investments and managed cash and cash equivalents 15.7 (1.1)
Net investment return adjusted for interest and foreign exchange 116.3 66.9
Average invested assets including managed cash and cash equivalents* 3,211.4 2,829.1
Approximate total investment return 3.6% 2.4%
Reported total investment return 3.7% 2.3%
*Calculated as the average between the opening and closing investments and our
managed cash and cash equivalents.
Total shareholder return (KPI):
Determined using the simple method of calculating the increase/(decrease) in
the Group’s share price, adjusted for dividends (included at the ex-dividend
date) as recalculated below. This measurement basis will generally approximate
the increase/(decrease) in share price in the period measured on a total
return basis, which assumes the reinvestment of dividends.
As at 30 June 2025 31 December 2024
Opening share price $8.25 $7.96
Q1 dividend per share $0.25 $0.50
Q2 dividend per share $0.15 $0.15
Q2 closing share price $7.89 —
Q3 dividend per share — $0.075
Q4 dividend per share — $0.75
Q4 closing share price — $8.25
Total shareholder return 0.4% 22.1%
Gross premiums written:
The Group adopted IFRS 17 on 1 January 2023. Under IFRS 4, the previous
insurance accounting standard, the Group reported gross premiums written on
the consolidated statement of comprehensive income as amounts payable by the
insured, excluding any taxes or duties levied on the premium, including
brokerage and commission deducted by intermediaries and any inwards
reinstatement premiums. The Group continues to report gross premiums written
as a growth metric and non-GAAP APM.
The table below reconciles gross premiums written on an IFRS 4 basis to
insurance revenue on an IFRS 17 basis.
For the six months ended 30 June 2025 2024
Gross premiums written 1,356.2 1,282.2
Change in unearned premiums (246.0) (296.2)
Gross premiums earned 1,110.2 986.0
Adjust for reinstatement premiums (41.2) 0.3
Less commission and non-distinct investment components (138.9) (132.2)
Total insurance revenue 930.1 854.1
Gross premiums written under management (KPI):
The gross premiums written under management equals the total of the Group’s
consolidated gross premiums written, plus the external Names portion of the
gross premiums written in Syndicate 2010.
For the six months ended 30 June 2025 2024
Gross premiums written by the Group 1,356.2 1,282.2
LSL Syndicate 2010 - external Names portion of gross premiums written (unconsolidated) 53.5 75.7
Total gross premiums written under management 1,409.7 1,357.9
NOTE REGARDING RPI METHODOLOGY
THE RENEWAL PRICE INDEX (“RPI”) IS AN INTERNAL METHODOLOGY THAT MANAGEMENT
USES TO TRACK TRENDS IN PREMIUM RATES OF A PORTFOLIO OF INSURANCE AND
REINSURANCE CONTRACTS. THE RPI WRITTEN IN THE RESPECTIVE SEGMENTS IS
CALCULATED ON A PER CONTRACT BASIS AND REFLECTS MANAGEMENT’S ASSESSMENT OF
RELATIVE CHANGES IN PRICE, TERMS, CONDITIONS AND LIMITS AND IS WEIGHTED BY
PREMIUM VOLUME. THE RPI DOES NOT INCLUDE NEW BUSINESS, TO OFFER A CONSISTENT
BASIS FOR ANALYSIS. THE CALCULATION INVOLVES A DEGREE OF JUDGEMENT IN RELATION
TO COMPARABILITY OF CONTRACTS AND THE ASSESSMENT NOTED ABOVE. TO ENHANCE THE
RPI METHODOLOGY, MANAGEMENT MAY REVISE THE METHODOLOGY AND ASSUMPTIONS
UNDERLYING THE RPI, SO THE TRENDS IN PREMIUM RATES REFLECTED IN THE RPI MAY
NOT BE COMPARABLE OVER TIME. CONSIDERATION IS ONLY GIVEN TO RENEWALS OF A
COMPARABLE NATURE SO IT DOES NOT REFLECT EVERY CONTRACT IN THE PORTFOLIO OF
CONTRACTS. THE FUTURE PROFITABILITY OF THE PORTFOLIO OF CONTRACTS WITHIN THE
RPI IS DEPENDENT UPON MANY FACTORS BESIDES THE TRENDS IN PREMIUM RATES.
NOTE REGARDING FORWARD-LOOKING STATEMENTS
CERTAIN STATEMENTS AND INDICATIVE PROJECTIONS (WHICH MAY INCLUDE MODELLED LOSS
SCENARIOS) MADE IN THIS RELEASE OR OTHERWISE THAT ARE NOT BASED ON CURRENT OR
HISTORICAL FACTS ARE FORWARD-LOOKING IN NATURE INCLUDING, WITHOUT LIMITATION,
STATEMENTS CONTAINING THE WORDS “BELIEVES”, “AIMS”, “ANTICIPATES”,
“PLANS”, “PROJECTS”, “FORECASTS”, “GUIDANCE”, “INTENDS”,
“EXPECTS”, “ESTIMATES”, “PREDICTS”, “MAY”, “CAN”,
“LIKELY”, “WILL”, “SEEKS”, “SHOULD”, OR, IN EACH CASE, THEIR
NEGATIVE OR COMPARABLE TERMINOLOGY. SUCH FORWARD-LOOKING STATEMENTS INVOLVE
KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER IMPORTANT FACTORS THAT COULD
CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE GROUP TO BE
MATERIALLY DIFFERENT FROM FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS
EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. FOR A DESCRIPTION OF
SOME OF THESE FACTORS, SEE THE GROUP’S ANNUAL REPORT AND ACCOUNTS FOR THE
YEAR ENDED 31 DECEMBER 2024 AND THE UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2025. IN ADDITION TO
THOSE FACTORS CONTAINED IN THE GROUP’S 2024 ANNUAL REPORT AND ACCOUNTS AND
THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX
MONTHS ENDED 30 JUNE 2025, ANY FORWARD-LOOKING STATEMENTS CONTAINED IN THIS
RELEASE MAY BE AFFECTED BY: THE IMPACT OF TRADE TARIFFS AND THE POSSIBILITY OF
A CONTINUATION OR ESCALATION OF GLOBAL OR REGIONAL TRADE DISRUPTION ARISING
THEREFROM AND THE CONSEQUENT ECONOMIC UNCERTAINTY WHICH MAY AFFECT
(RE)INSURANCE DEMAND OR THE PERFORMANCE OF OUR INVESTMENT PORTFOLIO. ALL
FORWARD-LOOKING STATEMENTS IN THIS RELEASE OR OTHERWISE SPEAK ONLY AS AT THE
DATE OF PUBLICATION. LANCASHIRE EXPRESSLY DISCLAIMS ANY OBLIGATION OR
UNDERTAKING (SAVE AS REQUIRED TO COMPLY WITH ANY LEGAL OR REGULATORY
OBLIGATIONS INCLUDING THE RULES OF THE LONDON STOCK EXCHANGE) TO DISSEMINATE
ANY UPDATES OR REVISIONS TO ANY FORWARD-LOOKING STATEMENT TO REFLECT ANY
CHANGES IN THE GROUP’S EXPECTATIONS OR CIRCUMSTANCES ON WHICH ANY SUCH
STATEMENT IS BASED. ALL SUBSEQUENT WRITTEN AND ORAL FORWARD-LOOKING STATEMENTS
ATTRIBUTABLE TO THE GROUP OR INDIVIDUALS ACTING ON BEHALF OF THE GROUP ARE
EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THIS NOTE. PROSPECTIVE INVESTORS
SHOULD SPECIFICALLY CONSIDER THE FACTORS IDENTIFIED IN THIS RELEASE AND THE
REPORT AND ACCOUNTS NOTED ABOVE WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER
BEFORE MAKING AN INVESTMENT DECISION.
Consolidated statement of comprehensive income
For the six months ended 30 June 2025 $m 2024 $m
Insurance revenue 930.1 854.1
Insurance service expenses (792.1) (472.2)
Insurance service result before reinsurance contracts held 138.0 381.9
Allocation of reinsurance premium (203.6) (213.7)
Amounts recoverable from reinsurers 221.3 54.6
Net expense from reinsurance contracts held 17.7 (159.1)
Insurance service result 155.7 222.8
Net investment return 108.2 75.2
Finance expense from insurance contracts issued (73.0) (28.3)
Finance income from reinsurance contracts held 16.3 9.3
Net insurance and investment result 207.2 279.0
Share of profit of associate 1.8 7.5
Other income 3.7 4.8
Net foreign exchange losses (1.4) (2.0)
Other operating expenses (64.2) (49.8)
Equity based compensation (11.4) (9.6)
Financing costs (17.1) (16.3)
Profit before tax 118.6 213.6
Tax charge (9.4) (12.8)
Profit after tax 109.2 200.8
Earnings per share
Basic $0.45 $0.84
Diluted $0.44 $0.82
Consolidated statement of financial position
As at 30 June 2025 $m 31 December 2024 $m
Assets
Cash and cash equivalents 653.2 684.3
Accrued interest receivable 24.2 22.0
Investments 2,993.5 2,864.9
Reinsurance contract assets 620.8 557.2
Other receivables 31.3 20.5
Investment in associate 8.0 9.1
Right-of-use assets 14.4 16.2
Property, plant and equipment 7.9 8.7
Intangible assets 196.7 197.0
Total assets 4,550.0 4,379.9
Liabilities
Insurance contract liabilities 2,461.7 2,300.4
Other payables 73.0 91.9
Corporation tax payable 10.0 2.7
Deferred tax liability 22.5 22.3
Lease liabilities 21.7 22.3
Long-term debt 447.2 447.0
Total liabilities 3,036.1 2,886.6
Shareholders' equity
Share capital 122.0 122.0
Own shares (12.0) (20.5)
Other reserves 1,241.7 1,242.3
Retained earnings 162.2 149.5
Total shareholders’ equity 1,513.9 1,493.3
Total liabilities and shareholders’ equity 4,550.0 4,379.9
Consolidated statement of cash flows
For the six months ended 30 June 2025 $m 2024 $m
Cash flows from operating activities
Profit before tax 118.6 213.6
Adjustments for:
Tax paid (2.1) (1.8)
Depreciation 3.3 3.1
Amortisation on intangible assets 1.5 0.3
Interest expense on long-term debt 12.9 12.9
Interest expense on lease liabilities 0.6 0.8
Interest income (71.7) (61.7)
Dividend income (9.9) (8.2)
Net unrealised gains on investments (31.0) (6.9)
Net realised losses on investments 1.3 1.2
Equity based compensation 11.4 9.6
Foreign exchange losses 2.1 1.0
Share of profit of associate (1.8) (7.5)
Changes in operational assets and liabilities
Insurance and reinsurance contracts 55.8 57.3
Other assets and liabilities (35.1) 3.5
Net cash flows from operating activities 55.9 217.2
Cash flows used in investing activities
Interest income received 69.5 56.9
Dividend income received 9.9 8.2
Purchase of property, plant and equipment (0.6) (0.8)
Internally generated intangible assets (1.2) (0.9)
Investment in associate 2.9 7.5
Purchase of investments and capital contributions (780.9) (802.0)
Proceeds on sale of investments and return of capital 707.5 634.5
Net cash flows used in investing activities 7.1 (96.6)
Cash flows used in financing activities
Interest paid (12.9) (12.9)
Lease liabilities paid (3.2) (2.0)
Dividends paid (96.5) (155.9)
Distributions by trust (3.8) (1.3)
Net cash flows used in financing activities (116.4) (172.1)
Net decrease in cash and cash equivalents (53.4) (51.5)
Cash and cash equivalents at beginning of year 684.3 756.9
Effect of exchange rate fluctuations on cash and cash equivalents 16.6 (7.0)
Effect of other items on cash and cash equivalents 5.7 (0.2)
Cash and cash equivalents at end of year 653.2 698.2
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