Insights
Lancashire 1Q25 trading statement
Posted 01/05/2025 – Insights
Lancashire plc has released its trading statement for 1Q25 ending 31st March 2025.
Group headline figures
- Gross premiums written increased by 12.7% year-on-year to $712.1m, with a Group Renewal Price Index (RPI) of 97%
- Insurance revenue increased by 8.7% year-on-year to $458.9m
- No change to the previously communicated range for the LA Wildfires
- Total investment return of 1.9%, including unrealised gains and losses
- Regulatory ECR ratio of 271% as at 31 December 2024
Alex Maloney, Chief Executive Officer, said:
“For the first three months of 2025 gross premiums written increased by 12.7% year-on-year to $712.1 million. The underlying increase, excluding the impact of reinstatement premiums, was 6.6%. Across our portfolio, we have continued to take advantage of underwriting opportunities, while maintaining our usual discipline and focus on risk and positive returns. In a challenging environment, the resilience of the business is clear, with our greater scale and diversification, across classes and geographies, giving us the ability to better withstand volatility and deliver consistently healthy returns for our shareholders. As we outlined in March, in a severe loss year with a similar level of catastrophe and large risk losses as 2024, as well as the California wildfires, we would still expect to deliver a RoE in the mid-teens for 2025.”
Divisional headline figures
|
|
Insurance written premiums 1Q25 ($m) | Insurance written premiums 1Q24 ($m) | Percentage premium change | Rate change |
|
Reinsurance |
482.3 | 399.7 | 20.7% | -4% |
| Insurance | 229.8 | 232.0 |
-0.9% |
-2% |
| Total | 712.1 | 631.7 | 12.7% |
-3% |
Claims
- Lancashire’s estimated loss for LA wildfires, remains in the range of $145m to $165m
- No other losses were material for the group in the quarter
Alpha comment
This is a good start to the year for Lancashire. The group has noticeably grown its reinsurance division with new business opportunities across property, casualty, marine and energy. The decline in insurance premium was mainly due to reductions in the aviation class, where rate adequacy is in question. Our expectation is that the majority of Lancashire’s wildfire losses will fall on its reinsurance division. Our exposure to Lancashire is through syndicate 2010. We await the first forecast for the 2024 year of account later this month which will include the impact of the fires.
