Lancashire’s GPW up 11% in 2024 with growth in property and specialty reinsurance

Bermuda-based Lancashire Holdings Limited recorded profit after tax of $321.3 million in 2024, which is in line with the prior year, with a solid 80% combined ratio for the year as the firm’s insurance and reinsurance businesses performed well.

Across the Group, Lancashire gross premiums written (GPW) increased by 11% year on year to $2.149 billion, while insurance revenue totalled $1.765 billion, an increase of 16% on 2023’s $1.519 billion.

The carrier’s full year 2024 insurance service result amounted to $379.9 million in 2024, a slight 1% decrease when compared with 2023, while net investment income also increased by 1% to $162.2 million in 2024.

Lancashire’s Group loss ratio rose to 71.3% in 2024 from 65.1% in 2023, as the combined ratio deteriorated to 80% from 74.9%, with an undiscounted combined ratio of 89.1% for 2024, up on 2023’s 82.6%.

Allocation of reinsurance premiums increased by $14.6 million, or 3.4%, during 2024 compared to 2023 to $439.4 million, and as a percentage of insurance revenue for the Group was 24.9%, a decrease from 27.9% in the prior year.

In terms of claims, Lancashire experienced net losses, undiscounted and including reinstatement premiums, from catastrophe, weather and large loss events of $214.1 million in 2024, of which $122.7 million relates to catastrophe and weather losses, the most significant event being Hurricane Milton, as well as impacts of Hurricanes Helene and Debby, storm Boris, and the Calgary hailstorms.

Losses from large risk events totalled $91.4 million in 2024, the most significant being the MV Dali Baltimore bridge collision loss.

Despite total net losses from 2024 coming in above 2023’s $106.1 million, Lancashire says that none of these losses were individually material for the firm.

Lancashire also booked $121.1 million of favourable prior accident year loss development in 2024, primarily due to attritional loss experience in respect of the 2023 accident year, together with catastrophe event reserve releases on the 2022 and 2021 accident years.

Net investment income, excluding realised and unrealised gains and losses, hit $144.8 million in 2024, an increase of 33.5% compared to 2023. The total investment return for last year was 5%, so a slight decrease on 2023’s 5.7%.

Both the reinsurance and insurance segments grew in 2024, with the former recording GPW of $1.097 billion compared with $967.5 million in 2023, driven by new business within the property reinsurance and specialty reinsurance lines. The RPI for the reinsurance segment was largely flat for the year at 101%.

Insurance GPW increased to $1.051 billion in 2024 from $964.2 million in 2023, driven by new business within the property class, including business written through both Lancashire US and Lancashire Australia distribution channels for the property direct and facultative line of business.

Within reinsurance, revenue increased to $855.1 million from $714.9 million, and the segment’s insurance service result increased to $264.1 million from $207.9 million.

Insurance segment revenue totalled $910 million in 2024 compared with $805 million in 2023, while the insurance service result fell from $174.2 million in 2023 to $115.8 million in 2024.

Alex Maloney, Group Chief Executive Officer, said: “2024 was another superb year for Lancashire with an excellent profit after tax of $321.3 million delivering a strong return on equity of 23.4%.

“In a year of high industry losses this is an outstanding result. It shows the continued successful execution of our strategy to grow materially at the right time in the underwriting cycle, utilise our capital more efficiently, diversify our portfolio to reduce volatility, and retain and attract the best talent.

“Throughout 2024, we continued to take advantage of the healthy margin environment. Gross premiums written increased by 11.3% to more than $2.1 billion and insurance revenue was $1.7 billion, an increase of 16.1% on 2023.

“As a result, we delivered an excellent underwriting return, with an insurance service result of $379.9 million and a combined ratio of 89.1% (80.0% discounted), underpinned by our robust and disciplined underwriting approach.

“Also contributing to our strong performance was our investment portfolio, which returned a very healthy 5% for the year.

“Our overall performance enabled us to deliver increased returns for our investors with total capital returned of $354.2 million during the year.

“Additionally, the Board has declared a total year-end dividend of $0.40, comprising a final ordinary dividend of $0.15 per common share, subject to shareholder approval, and a special dividend of $0.25 per common share.

“Returning excess capital generated to our shareholders has always been a core part of Lancashire’s DNA and, importantly, we remain extremely well capitalised to fund future growth opportunities.

“In 2024, we continued to deploy our strategy that has seen us more than double the number of product classes that we write since 2018 giving us access to more of these opportunities in a compelling market where margins remain strong.

“Demand also remains resilient as 2024 was another year of high industry losses and our clients and business partners continue to see value in our specialised (re)insurance solutions.”

Adding: “We have achieved the results we are reporting today due to the hard work of everybody in the Group and their belief in our strategy and vision. I would like to thank them all for their commitment to the business and for playing their part in driving forward our strong and positive culture.

“Early in 2025, we have seen the terrible devastation wrought by the wildfires in California on those communities. As recently announced, for Lancashire, the impact is expected to be within the range $145 million to $165 million.

“With a similar level of catastrophe and large losses as 2024, in addition to the wildfire loss, we would anticipate delivering an RoE in the mid-teens in 2025. Whilst this assumes a significantly above average loss environment, our guidance clearly demonstrates the continued delivery of our strategy of more predictable returns for investors.

“As always, I would like to thank our clients, their brokers, our shareholders and other stakeholders for their support.

“In 2025, Lancashire is celebrating its 20th anniversary and, while we look back with pride on our achievements and how the business has evolved, we also look forward with confidence to the opportunities to develop this fantastic company further.”

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