Lancashire Holdings shares jump on robust third-quarter update

Lancashire Holdings reported significant growth and a robust financial performance in an update on Thursday, with a notable 23.2% year-on-year increase in gross premiums written, reaching a substantial $1.6bn.

The FTSE 250 company said IFRS 17 insurance revenue experienced a 22.1% year-on-year uptick to $1.1bn for the nine months ended 30 September.

Its group renewal price index (RPI) stood at 117%, indicating strong demand for Lancashire’s services.

In terms of investments, Lancashire reported a total net investment return of 2.8%, including both unrealised gains and losses.

The company announced a capital return of up to $169m, including $119m in special dividends and up to $50m allocated for share buy-backs.

“During the first nine months of 2023, we have continued to successfully implement our long-term strategy to manage the market cycle and deliver strong profitable growth through a portfolio of diversified products,” said group chief executive officer Alex Maloney.

“Gross premiums written increased by 23.2% to $1.6bn in the year to date, with rates remaining extremely attractive across our product lines.

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

Maloney said the company’s investment returns also continued to benefit from the higher interest rate environment and the short duration of its portfolio, with a total net investment return, including unrealised gains and losses, of 2.8% for the period.

“Capital management and balancing risk and return have for a long time been at the heart of our strategy, and we continue to hold an extremely robust capital position.

“Our disciplined underwriting and successful diversification strategy mean that we are in a position to pay out some of the capital generated to date and still have the flexibility to fund further growth and realise our ambitions for this phase of the market cycle.

“Following the strong operating performance in the year-to-date, I am pleased to report that the board has approved a capital return of up to $169m, including $119m in special dividend and up to $50m in buy-backs.”

Alex Maloney added that Lancashire’s previously-announced plans to expand its international footprint further through Lancashire Insurance US were continuing, with the firm satisfied with the progress made towards an underwriting launch in early 2024.

At 0921 GMT, shares in Lancashire Holdings were up 8.82% at 660p.

Reporting by Josh White for Sharecast.com.