Lancashire Holdings Limited estimates that its net ultimate losses from the California wildfires in January 2025 will range between US$145 million and US$165 million.
The company also iterated that the estimate falls within its modelled loss expectations for such catastrophe events.
The estimate is undiscounted and reflects anticipated recoveries from Lancashire’s outwards reinsurance programme, as well as the impact of both outwards and inwards reinstatement premiums. According to Lancashire, the financial impact has been assessed considering these factors.
Despite the anticipated losses, group chief executive officer Alex Maloney (pictured above) has insisted that Lancashire’s financial position remains strong, citing earnings performance and capital generation in 2024 as factors that support the company’s strategic objectives.
Maloney also pointed to Lancashire’s aggregate reinsurance cover, designed to mitigate the financial impact of large catastrophe events. He said the cover should enable the company to achieve returns for shareholders in 2025 despite the losses.
Lancashire announced plans to provide further details on its financial position and guidance for 2025 as part of its full-year results announcement on March 6.
Based on its trading update for the nine months ending September 30, 2024, the insurance group has been on an upward trend, with its latest financial results showing growth in gross premiums written, insurance revenue, and an enhanced investment portfolio.
This is after considering exposure to several major catastrophe loss events in the third quarter, including hurricanes Helene and Debby, storm Boris, and the Calgary hailstorm.
Lancashire's gross premiums for written in the period increased by US$140.1 million, or 9%, reaching US$1.7 billion.
In the insurance segment, gross premiums rose by 12.4%, reaching US$941.2 million, while the insurance segment's premiums grew by 5.1% to US$758.8 million.
Insurance revenue reached US$1.3 billion, up $186.8 million, or 16.8%, compared to the same period last year, bolstered by earnings from prior years.
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