Insights
Lancashire 1H24 trading statement
Posted 12/08/2024 – Insights
Lancashire plc has released its trading statement for 1H24 ending 30th June 2024.
Main highlights
- Gross premiums written increased by 8.3% to $1,282.2m (H1 2023: $1,184.0m)
- Insurance revenue increased by 18.5% to $854.1m (H1 2023 $720.9m)
- Group Renewal Price Index (RPI) of 102%
- Total investment return, including unrealised gains and losses, of 2.3%
- Undiscounted combined ratio of 82.2% (2023: 79.2%)
Alex Maloney, Chief Executive Officer, said:
“Lancashire has delivered its best ever half-year performance in the first six months of 2024. This outstanding result demonstrates the continued success of our long-term strategy to manage the market cycle and further strengthen our business through diversification. We have continued to take advantage of favourable market conditions while holding true to our principles of disciplined underwriting and optimised capital allocation. As we head into the remainder of 2024, building on this record half-year performance, we look with confidence to 2025 and beyond.”
The group’s headline figures for 1H24 are as follows:
Reinsurance division
- Gross premiums written for the first six months of 2024 increased by $76.6m, or 11.6% when compared to the same period in 2023.
- The property reinsurance and specialty reinsurance lines were the significant drivers of growth.
Insurance division
- Growth from new business within the property segment, including business written through both Lancashire U.S. and Lancashire Australia distribution channels, as well as the continued build-out of the property construction class.
- These increases were partly offset by the timing of multi-year renewals in the political risk and marine classes.
Claims
- Net losses from catastrophe and large loss events totalled $45.5m.
- None of these events were individually material, including the MV Dali Baltimore bridge collision.
Investments
- Current book yield has increased to 4.7% and the market yield has also improved to 5.6% (2023: 5.3%) as the portfolio benefitted from higher reinvest yields.
- Duration has further increased to 1.9 years in anticipation of rate cuts in the near future.
Alpha comment
These are good half year results from Lancashire. The group is clearly taking advantage of market conditions and capitalising with rate increases of +2% so far for 2024. Major losses to date are similar to those of 2023, which was a year of low major losses. Although we await the US hurricane season which experts predict to be highly active, Lancashire has delivered a promising first half year result.
