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Lancashire Holdings Q1 top line soars 46.1% as P&C re GWP doubles

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Lancashire Holdings grew its first-quarter gross written premium (GWP) by 46.1% to $354.8mn, the highest level ever for the period.

GWP: Top-line growth was driven by the property and casualty reinsurance segment, which expanded premiums by 97% through new business and rate increases. The energy segment grew by 27% amid rate growth and exposure increases in energy liability and within power and utility lines.

Rates: The carrier’s renewal price index was 112% in the first quarter, up from 108% in the same period last year. All lines of business reported increases, but aviation, energy and marine reported the fastest growth.

Claims: Lancashire estimated net losses from Winter Storm Uri at between $35mn and $45mn, and said that its total loss estimate for Covid-19 related losses remained unchanged. On announcing 2020 results, the carrier had kept its Covid-19 estimate stable at around $42mn, with most of its exposure coming from the property segment. The group added the prior-year favourable development for the first quarter was $4.7mn, compared with adverse development of $17mn in the same period last year.

Investment: The group’s investment portfolio reported a flat return during the first quarter, up from a negative return of 1.9% in the same period last year. According to the carrier Lancashire’s fixed maturity portfolios incurred losses but this was mitigated by a narrowing of credit spreads and strong returns from its hedge fund and private debt portfolios.

CEO Alex Maloney said: “Our growth was driven by the improved market conditions. We have increased revenue across many of our core lines as well as achieving faster than expected momentum in some of our newer business lines.

“Absent the estimated impact of Winter Storm Uri, our underlying financial performance was strong. We look forward to the exciting opportunities that are expected to develop throughout the year as we are able to more flexibly combine the benefits of remote interaction with a return to the office environment.”

He added that Lancashire’s balance sheet, boosted by a $450mn debt raise it closed last month, “stands us in good stead to fund the opportunities we see ahead".

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