Lancashire ups GWP 35% and trims loss ratios
Bermuda-based specialty re/insurer Lancashire Holdings enjoyed a 35 percent surge in gross written premium (GWP) and trimmed 2.5 percentage points (pps) from its combined ratio, but watched as market mayhem hacked down those gains by the bottom line.
GWP of $938.1 million was up 34.6 percent year on year, with P&C reinsurance, P&C primary insurance and Marine all showing growth above 40 percent.
“We continue to see attractive rate increases across a number of business lines with a renewal price index for the first six months of 106 percent,” CEO Alex Maloney (pictured) commented. He claims a “successful” diversification of the portfolio behind the improvement in underwriting gains.
GWP in P&C reinsurance rose 45.4 percent “driven by new business in casualty reinsurance and financial lines classes,” management said. The segment earned in strong sums from 2021 contracts, management added.
Growth in P&C primary insurance of 40.5 percent “reflects new business and continued build out of the property D&F book as favourable market conditions persist” and includes a “meaningful contribution” from new business in property construction, plus business from a new Australian cover holder, management said.
Elsewhere, aviation contracted lightly in H1 with management noting that H2 is the larger renewal season and better litmus test.
The energy segment grew 7.2 percent following a build-out of sales teams and product line-ups by Lancashire, just enough to overcome the impact of Lancashire’s resignation from the Gulf of Mexico lines.
Marine is up 40 percent year on year on new business the marine cargo and marine liability.
The group’s net loss ratio came down 0.5 pps to 37.9 percent. Ukraine, Australia and South Africa tempered notable improvements that would have stemmed just from the lack of winter storm Uri on current year accounts. Attritional losses are said to be running at the high end of guidance on account of the changing business mix.
Lancashire currently sees some $22 million ultimate net losses incurred within Ukraine since the start of the conflict, within the lower range of its prior $20 million to $30 million guidance.
“We continue to closely monitor our exposure with regards to Russia, which remains a complex and fluid situation,” Maloney said. “We believe that any potential losses would be within our risk tolerances, and would not impact our strategy or our ability to deliver on our ambitious growth plans.”
Inflation is said to be “not a major concern” given Lancashire's focus on short-tail lines, the group’s experience handling fuel prices in its energy sector and regular and systematic insured value updates, management claimed.
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