Lancashire results news for year end 2022

Lancashire Holdings Ltd - global insurer and reinsurer, HQ Bermuda - released its results for the 2022 year today.

Highlights

• Gross premiums written increased by 35% year-on-year to $1.7 billion - the highest in Lancashire's history;
• Underwriting profit doubled from $69m to $151m
• Total net investment return of -3.5% on $2,466m driven by unrealised losses due to interest rate increases and other factors;
• Group loss after unrealised losses and expenses ($93m);
• In the five years since 2017, gross premiums written increased by almost 280%;
• Combined ratio (incurred losses divided by earned premium) of 97.7% (107.3% in 2021) showing lower net expenses and net loss ratios;
• Strong start to 2023 at 1 January 2023 renewals with a Group Renewals Price Index of 108%.

Losses

Loss ratio down from 67.6% to 58.3%. Hurricane Ian provisions of US$163.3m. "Hurricane Ian within our expectations for these types of events."

"Our provision for large risk events for the year amounted to $90.4 million and include $65.8 million related to the ongoing conflict in Ukraine and $24.6 million from an accumulation of four large losses in the energy upstream and power generation lines of business"

From the above it appears that the Ian loss quantum is unchanged.

In the Q2 2022 statement of half-year results the Ukraine estimate was US$22m and in Q4 Lancashire added a "management margin" for any indirect claims which reflected the high level of uncertainty with this loss.

Prior years

Positive releases of US$100.5m ($86.5m 2021)

Outlook

"As we look into 2023, wider capacity constraints – due particularly to the increasing cost of capital and historic loss activity – are expected to give us considerable opportunities to further strengthen our franchise at a time in the cycle of expanding margins."

"Industry loss events such as hurricane Ian and the conflict in Ukraine provide further impetus for continued improvement in both rating and terms and conditions in 2023."