27th July 2022

Lancashire reports 34.6% GWP increase and 78.2 combined ratio for first half

Lancashire Holdings has announced its results for the first six months-highlights are:
- Gross premiums written increased by 34.6% year-on-year to $938.1m
-Group RPI (Renewal Price Index) of 106%
-Excellent underwriting performance, with a combined ratio of 78.2
-Profit before tax of $78m
-Total net investment return of negative 3.8%, primarily driven by unrealised losses
-Interim dividend of $0.05 per common share, in line with dividend policy
Alex Maloney, Group ceo, comments:
“The Group delivered strong premium growth in the first half of the year with a 34.6% increase in gross premiums written year-on-year to $938.1m. We continue to see attractive rate increases across a number of business lines with a renewal price index for the first six months of 106%.
Over the past few years, we have successfully diversified our underwriting portfolio. I am pleased that we are seeing a strong performance from a number of these newer classes of business while we are also continuing to benefit from those products where we have longer-standing expertise. This has resulted in an excellent underwriting performance for the first half of 2022 with a combined ratio of 78.2 and
profit before tax of $78m.
We previously gave a range of $20m to $30m for potential incurred losses within Ukraine.
Our ultimate net losses incurred within Ukraine since the start of the conflict are towards the lower end f our initial range at $22m(excluding the impact of reinstatement premiums).
We continue to closely monitor our exposure with regards to Russia, which remains a complex and fluid situation. We believe that any potential losses would be within our risk tolerances, and would not impact our strategy or our ability to deliver on our ambitious growth plans.
While broader macro-economic issues are impacting the outlook for the global economy, we believe that the strong rate environment for many of our products is the best we have seen for more than a decade and that it will continue through the second half of 2022 and into 2023. This includes riskadjusted rate rises and attractive opportunities across lines impacted by the conflict in Ukraine.
During the first half of 2022, the investment environment has proved volatile and the upwards trend in US interest rates has resulted in a negative investment performance of 3.8% or in dollar terms an investment loss of $85.8m. This includes $83m of unrealised losses on our fixed maturity
AFS portfolio due to market value changes. Overall, our investment strategy remains conservative and the return to a higher interest rate environment should boost future earnings in our portfolio.
We continue to be strongly capitalised giving us the firepower to execute our long-term strategy to grow premiums where we believe there are attractive returns while retaining our strict focus on underwriting discipline.

Lancashire Trends(97 articles)

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