REG-Lancashire Holdings Ltd: Q1 Trading Statement

Lancashire HoldingsAnnouncement

Today 07:02

LANCASHIRE HOLDINGS LIMITED

 

1 May 2025

Hamilton, Bermuda

 

Lancashire Holdings Limited (“Lancashire” or “the Group”) today
announces its trading statement for the three months ended 31 March 2025.

 

Trading statement highlights

 

•          Gross premiums written increased by 12.7% year-on-year
to $712.1 million, with a Group Renewal Price Index (RPI) of 97%.

•          Insurance revenue increased by 8.7% year-on-year to
$458.9 million.

•          No change to the previously communicated range for the
California wildfires, between $145 million and $165 million.

•          Total investment return of 1.9%, including unrealised
gains and losses.

•          Regulatory ECR ratio of 271% as at 31 December 2024.

 

Alex Maloney, Group Chief Executive Officer, commented:

 

“For the first three months of 2025 gross premiums written increased by
12.7% year-on-year to $712.1 million. The underlying increase, excluding the
impact of reinstatement premiums, was 6.6%.
 

Across our portfolio, we have continued to take advantage of underwriting
opportunities, while maintaining our usual discipline and focus on risk and
positive returns.

 

In a challenging environment, the resilience of the business is clear, with
our greater scale and diversification, across classes and geographies, giving
us the ability to better withstand volatility and deliver consistently healthy
returns for our shareholders.

Insurance revenue increased by 8.7% year-on-year to $458.9 million, with the
Group RPI for the quarter at 97%. We continue to focus on profitable growth
and rating levels remain more than adequate, albeit slightly lower than the
highs of recent years.

Our investment portfolio remains relatively conservative and returned 1.9% for
the quarter. In an increasingly unpredictable global financial climate, we
will continue to maintain a short duration and high quality portfolio.
 

The estimated impact of the wildfires in California, which occurred in
January, remains unchanged at between $145 million to $165 million. No other
loss events were individually material for the Group in the quarter. Absent
the wildfires the underlying performance of the business is strong. 
 

As we outlined in March, in a severe loss year with a similar level of
catastrophe and large risk losses as 2024, as well as the California
wildfires, we would still expect to deliver an RoE in the mid-teens for 2025.

 

Our performance, and outlook, set against the loss environment the sector has
seen in the last twelve months demonstrates the relevance of our strategy and
the quality of our underwriting teams and distribution relationships.  

We are in a very strong position overall and we remain extremely well
capitalised.”


 

 Business update

 

Gross premiums written and insurance revenue

                         Three months ended                                 
                         31 March 2025  31 March 2024  Change  Change  RPI  
                         $m             $m             $m      %       %    
 Reinsurance             482.3          399.7          82.6    20.7%   96%  
 Insurance               229.8          232.0          (2.2)   (0.9%)  98%  
 Gross premiums written  712.1          631.7          80.4    12.7%   97%  
                                                                            
 Reinsurance             220.3          201.8          18.5    9.2%         
 Insurance               238.6          220.2          18.4    8.4%         
 Insurance revenue       458.9          422.0          36.9    8.7%         

 

Gross premiums written

Gross premiums written increased by $80.4 million, or 12.7%, in the first
three months of 2025 compared to the same period in 2024. The reinsurance
segment saw new business growth in property, casualty, and the energy and
marine classes, as well as increased reinstatement premiums, largely related
to the California wildfire losses. Growth in the insurance segment, primarily
from the US platform, was offset by reductions across the aviation classes.

 

Insurance revenue

Insurance revenue increased by $36.9 million, or 8.7%, in the first three
months of 2025 compared to the same period in 2024. Overall, growth was lower
than for gross premiums written, primarily due to the reallocation of
reinstatement premiums under IFRS 17.


Loss environment

As previously communicated, the Group estimates its aggregate net ultimate
losses (undiscounted, including reinstatement premiums) related to the
California wildfires to be in the range of $145 million to $165 million. The
estimate falls within the Group’s modelled loss ranges for this type of
catastrophe event. Loss information after these types of events can take some
time to emerge. As additional information becomes available, the Group’s
actual ultimate net losses may vary, perhaps materially, from current
estimates. No other loss events were individually material for the Group in
the quarter.  

 

 


Investments

 As at                     31 March 2025  31 March 2024  
 Duration                  2.0 years      1.7 years      
 Credit quality            A+             A+             
 Book yield                4.8%           4.3%           
 Market yield              4.8%           5.4%           
 Managed investments ($m)  $3,098.3       $2,824.9       

 

The Group’s investment portfolio, including unrealised gains and losses,
returned 1.9% in the first quarter of 2025. The positive returns were driven
by investment income as our portfolio benefited from higher yields in
conjunction with higher prices from falling treasury rates, buffering the
slight widening of investment grade credit spreads. Additionally, our private
investment funds had very strong returns during the quarter.

  

Analyst and Investor Conference Call

There will be an analyst and investor conference call on the trading statement
at 1:00pm UK time / 9:00am Bermuda time / 8:00am EDT on Thursday 1 May 2025.
The conference call will be hosted by Lancashire management and a presentation
will be made available on the Group’s website prior to the call.

 

Participant Access

Please note that conference call participants are required to register in
advance to access either the audio conference call or webcast, the full
registration and access details are set out below. 
 

 Audio access:    https://emportal.ink/3RkdN4s                                                            
                  Please register to obtain your personal audio conference pin and call details.          
                                                                                                          
 Webcast access:  https://onlinexperiences.com/Launch/QReg/ShowUUID=D1D7C814-FC11-402A-82B1-57276119D861  
                  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

 


Contact information  

 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.

 

Lancashire 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 UK time on 1 May 2025.

 

 

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 ALTERNATIVE PERFORMANCE MEASURES:

 

THE GROUP USES ALTERNATIVE PERFORMANCE MEASURES TO HELP EXPLAIN BUSINESS
PERFORMANCE AND FINANCIAL POSITION. THESE MEASURES HAVE BEEN CALCULATED
CONSISTENTLY WITH THOSE AS DISCLOSED IN THE GROUP’S ANNOUNCEMENT OF ITS
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2024.

 


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. IN ADDITION TO THOSE FACTORS CONTAINED IN THE
GROUP’S 2024 ANNUAL REPORT AND ACCOUNTS, 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.



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