Lancashire Holdings Reports 97.7% Combined Ratio for 2022

Highlights

Gross premiums written increased by 35% year-on-year to $1.7 billion

• Alex Maloney (CEO) commented Lancashire “have to grow in excess of the rate change”.
• Lancashire want to grow their premiums.
• Over the last 5 years they have had premium growth from $600m to $1.7bn.
• They now write a more diversified portfolio across several different product lines.

Combined ratio of 97.7% demonstrating the benefit of growth and diversification

• A 9.6% improvement on the previous year.
• Improvement attributed to improving rate conditions, the addition of new business lines and the expense ratios moving in the right direction.
• Not a year without losses (Hurricane Ian, the conflict in Ukraine, Energy).
• Reserves increased from $22m to $68m (mainly for the Ukraine conflict) with the increase expected to encompass everything “we think we could be exposed to”.

Total net investment return of negative 3.5%, primarily driven by unrealised losses

• Losses due to volatility in global markets and higher interest rates.
• The majority of losses are largely unrealised and should benefit from better investment returns in 2023.
• Investment strategy remains unchanged.

Strong start to 2023 at 1 January renewals

• Five years of positive rate increases.
• Continue with a disciplined approach to underwriting while taking advantage of increased rates.
• Lancashire have grown their underwriting footprint across new product lines.
• Investment into new recruits and teams.

The full results statement and the analyst presentation pack here