Lancashire reports robust first quarter, makes executive appointment

Specialist insurer and reinsurer Lancashire Holdings reported a robust first-quarter performance in an update on Thursday, as it also announced the appointment of Paul Gregory as an executive director.

The FTSE 250 company said gross premiums written escalated 7.8% year-on-year in the quarter, reaching $631.7m.

It also reported a surge in insurance revenue, up 24.6% to $422m, while the group’s renewal price index stood at 104%.

Moreover, Lancashire's total investment return, including unrealised gains and losses, stood at 0.9%.

The company said it maintained a robust regulatory ECR ratio of 328% as of 31 December.

“Lancashire has had a very strong start to 2024, reporting a record quarter,” said chief executive officer Alex Maloney.

“We continue to see strong opportunities for profitable growth across our portfolio with a group RPI for the quarter of 104%.

“Our new US operation, Lancashire Insurance US, has now begun underwriting excess and surplus lines business in the property and energy casualty classes.”

Maloney said the company was “very pleased” with the strong team, and believed that there were significant long-term opportunities for Lancashire in the market.

“In terms of the loss environment, the market impact of the tragic Baltimore bridge disaster late in the quarter is still being assessed, however our potential exposure will be within our expectations for an event of this type.

“We affirm the guidance we gave for the 2024 financial year for an undiscounted combined ratio around the mid-80% range, and a return on equity, as measured by the change in diluted book value per share, of around 20%.

“On investments, our portfolio delivered a positive return of 0.9% for the quarter.”

The market yield of 5.4% was offset by mark to market movements on fixed maturities, Alex Maloney added.

“I am excited by the prospects for Lancashire as we move through 2024.

“Our strong balance sheet, with a regulatory ECR ratio of 328%, gives us the flexibility to achieve our goals.

“We remain focused on writing profitable business across our diversified product suite, offering relevant solutions to our clients, and fully delivering on our strategic priorities.”

In a separate announcement on Thursday morning, Lancashire said it had appointed Paul Gregory to its leadership team as an executive director.

It said Gregory would bring a wealth of experience, having served as the Lancashire group chief underwriting officer since May 2014.

His tenure spanned a number of roles within the company, including chief executive officer of Lancashire Insurance Company UK from 2014 to 2019.

Before joining Lancashire, Gregory held positions at AIG and Marsh, honing his expertise in energy underwriting and strategic leadership.

“We are delighted to welcome Paul to the board,” Alex Maloney added.

“Paul has been a trusted colleague, adviser and a valued member of our senior management team for many years.

“He is a welcome addition to our board.”

At 0833 BST, shares in Lancashire Holdings were up 1.16% at 609p.

Reporting by Josh White for Sharecast.com.