Insights
Lancashire 1H25 trading statement
Posted 06/08/2025 – Insights
Lancashire plc has released its trading statement for the first half of 2025 (1H25) ending 30th June 2025.
Main highlights
- Gross premiums written increased by 5.8% to $1,356.2m (H1 2024: $1,282.2m)
- Group Renewal Price Index (RPI) of 96% (H1 2024: 102%)
- Group undiscounted combined ratio of 97.8% (H1 2024: 82.2%)
- Investment return of 3.7% equivalent to $108.2m (H1 2024: $75.2m)
- Profit after tax of $109.2m (H1 2024: $200.8m)
Alex Maloney, Chief Executive Officer, said:
“Lancashire’s performance for the first six months of the year clearly demonstrates the increased resilience within our business model. Our strategy to grow at the right time in the cycle means we are better positioned, across various classes and geographies, than ever before. We have developed a robust, diversified and capital-efficient underwriting portfolio that can absorb the impact of significant industry loss events whilst delivering more predictable returns. We outlined earlier in the year, in a severe loss year with a similar level of catastrophe and large risk losses as 2024, in addition to the California wildfires, we would expect to deliver an RoE in the mid-teens for 2025. In light of our half-year 2025 performance, in the same scenario, we would now expect to deliver a high teens RoE. 2025 is our 20th year of operations and I am proud that we remain a healthy, relevant and strong player in the sector. Our accomplishments during the first six months of the year have only been made possible by the talented and committed people that we have across the Lancashire Group, in all functions and all regions.”
The group’s headline figures for 1H25 are as follows:
Reinsurance division
- Gross premiums written increased by 11.0% to $815.6m (H1 2024: $734.6m)
- RPI of 97% (H1 2024: 101%)
Insurance division
- Gross premiums written decreased by 1.3% to $540.6m (H1 2024: $547.6m)
- RPI of 96% (H1 2024: 103%)
Claims
- Lancashire’s catastrophe, weather and large losses for the first half of the year total $211.2m (H1 2024: $44.0m).
- No change to the Lancashire’s LA Wildfire loss estimate which remains in the range of $145m to $165m.
Capacity offer for Lancashire 2010
- Lancashire’s Mandatory Offer of 62p for every £1 of capacity has been successful in increasing Lancashire’s capacity from 79.7% to 99.4%.
- Lancashire has sent an application to Lloyd’s for permission to effect a minority buy-out for the remaining capacity.
Alpha comment
Lancashire has started the year positively growing its overall premium income and improved investment return. However, the group’s undiscounted combined ratio is high at 97.8% and is reflective of the above average catastrophe loss environment in the first half of the year. We expect that the LA Wildfires is a key driver of the high combined ratio. Interestingly Lancashire’s reinsurance rates have held up slightly better than its insurance division, with both showing reductions, possibly due to the increased competition for property D&F business, where Lancashire has quite a large portfolio. We would expect the minority buy-out to go through with Lancashire owning all its capacity on syndicate 2010 for the 2026 year of account.
