Lancashire Holdings Limited LRE

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

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

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.
 

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  

 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.