Specialty insurance and reinsurance group Lancashire Holdings has reported insurance revenue of $1.3 billion for the first nine months of 2024, an increase of $186.8 million, or 16.8%, compared to the same period in 2023, despite anticipating net losses relating to recent weather events of up to $140 million.
In focus, Lancashire’s Reinsurance segment saw GWP climb 12.4%, while the Insurance segment saw growth of 5.1%. According to the firm, new business in the property reinsurance and specialty reinsurance classes was the most significant driver of growth in the reinsurance segment.
At the same time, the property insurance portfolio was the main driver of growth within the insurance segment with new business coming through from the Lancashire U.S. and Lancashire Australia distribution channels.
As mentioned, insurance revenue was $1.3 billion for the first nine months of 2024. Of this total figure, the Reinsurance segment contributed $629.3 million, while the Insurance segment contributed $668.7 million.
Growth was reportedly more significant for insurance revenue than for gross premiums written due to the recognition of earnings coming through from prior years.
“During an active third quarter for catastrophe loss events, the Group had exposure to losses in respect of hurricanes Helene and Debby, the Calgary hailstorm, and storm Boris. These events were then followed by hurricane Milton in October,” Lancashire added.
The estimated ultimate net losses incurred in respect of all these weather events (undiscounted, including reinstatement premiums) is expected to be within the range of $110 million to $140 million.
During the first nine months of 2024, the Group also experienced net losses (undiscounted, including reinstatement premiums) from large risk events totaling $72.8 million.
As per Lancashire, none of these were individually material for the Group, with the MV Dali Baltimore bridge collision loss being the most significant.
Alex Maloney, Group Chief Executive Officer, commented, “I am pleased to report that Lancashire is in excellent shape as we approach the final months of 2024. Over the past few years, we have successfully made our business more resilient to withstand volatility and deliver more sustainable returns for investors.
“We expect to deliver in line with our ROE guidance for the year. In terms of gross premiums written in the first nine months of 2024, Lancashire continued to grow ahead of rate increasing premiums by 9% to $1.7 billion. The devastation caused by the recent weather events in the U.S. and other catastrophes has been tragic and our thoughts are with all those affected. Instances like these show the value of (re)insurance products in supporting communities to help them rebuild after major catastrophe events.
“In the year-to-date, the industry has seen an elevated catastrophe and risk loss environment, but we still expect our undiscounted combined ratio to be at the higher end of our range for the full year. This is testament to our diversification strategy, and the quality of the business we have written.
“Our estimated ultimate net losses incurred in relation to recent weather events including hurricanes Milton, which occurred in the fourth quarter, Helene, Debby and storm Boris, and the Calgary hailstorms, are expected to be in the range of $110 million to $140 million.”
Maloney continued, “Our strong underwriting results during the period have continued to be supported by our growing investment portfolio, which has now reached $3.2 billion, and has delivered a healthy return of 5% for the year to date. Following our strong operating performance, I am pleased to announce the approval of a special dividend of 75 cents per share, which will result in an aggregate payment of approximately $180 million.
“We continue to hold an extremely robust capital position to underwrite the growth opportunities we expect to see in 2025. Lancashire’s long-term strategy has always been to actively manage the market cycle and deliver strong profitability by taking advantage of opportunities in positive underwriting conditions.
“We will continue to do that during the remainder of 2024 and into 2025. We have talented and fully-committed teams across our Group and our strong balance sheet and capital base give us added confidence in our ability to drive the business forward. I would like to thank all my colleagues at Lancashire for their hard work so far this year and all our stakeholders for their continued support.”
