Lancashire Holdings has released its trading update for the nine months ending September 30, 2024, showing growth in gross premiums written, insurance revenue, and an enhanced investment portfolio.
Lancashire's gross premiums written increased by $140.1 million, or 9%, reaching $1.7 billion for the period. This rise was primarily driven by new business in property and specialty reinsurance within the reinsurance segment, and the US and Australian distribution channels for property insurance.
In the insurance segment, gross premiums rose by 12.4%, reaching $941.2 million, while the insurance segment's premiums grew by 5.1% to $758.8 million.
Insurance revenue reached $1.3 billion, up $186.8 million, or 16.8%, compared to the same period last year, bolstered by earnings from prior years.
The group reported exposure to several major catastrophe loss events in the third quarter, including hurricanes Helene and Debby, storm Boris, and the Calgary hailstorm. These events were followed by hurricane Milton in October. Total estimated net losses related to these weather events are projected between $110 million and $140 million.
The group also recorded net losses of $72.8 million from large risk events, with the most significant stemming from the MV Dali Baltimore bridge collision, though none of these individual events were material for Lancashire.
Lancashire’s investment portfolio produced a 5% return for the first nine months, benefiting from a rise in investment income, higher yields, and favourable movements in treasury rates. Managed investments reached $3.2 billion, up from $2.7 billion in the previous year, with the portfolio's book yield standing at 4.8% and market yield at 4.7%.
The board declared a special dividend of 75 cents per common share, or approximately 58 pence, with an aggregate payment of about $180 million. This dividend will be paid on December 13, 2024 to shareholders on record as of November 15, 2024. Shareholders can access additional options, including dividend reinvestment, through Link Asset Services.
Group CEO Alex Maloney (pictured above) noted that Lancashire's resilience has strengthened over recent years, positioning the company well to meet its return-on-equity targets for 2024.
“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 US 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,” Maloney said.
Maloney further highlighted the group’s robust capital position, a growing investment portfolio now worth $3.2 billion, and an investment return of 5% year-to-date. He confirmed the approval of a 75-cent special dividend following strong performance and outlined expectations for growth 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,” he said.
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