Lancashire Q3 Trading Statement

Lancashire released its Trading Statement as at end-September here in full.

Key extracts as follows with some extracts from the investors' conference:-

• Gross premiums up by 23% to US$1.6bn;
• Group Renewal Price Index of 117%;
• Investment return +2.8% on a short duration portfolio of investments - standing at the largest in the Group's history.

Property insurance is seeing significant rate increases with the insurance price index at 112%. "No obvious signs of reversal"

The reinsurance price index stands at 123%. A broad spread of casualty business is the biggest contributor to growth. Good timing but will keep at a lower proportion compared to others.

Speciality reinsurance (marine and terrorism) growing too.

Aviation is the "strongest insurance line in terms of pure rate change." Aviation reinsurance has seen strong rate increases with uncertainty over Russian claims potential and other losses.

2023 losses

Nothing individually material.

Outlook

"We continue to expect a positive environment into 2024, with further opportunities for Lancashire."

Lancashire is set to launch a US operation to capitalise on the US property insurance market's opportunities.

The Group will continue to grow into 2024 as market conditions remain favourable.

2024 will be the seventh consecutive year to grow the portfolio ahead of rate.

Reserve strengthening of the back years (2014-2018) elsewhere in the market will make the market keep its resolve for higher rates.

Comment

Lancashire will repay shareholders U$169 million - mostly as a special dividend - broadly equal to the half-year earnings. The shares are up 25% in the last month.