Lancashire insurance revenue jumps by almost 25%
Earnings from prior year periods helped to drive an almost 25% increase in Lancashire Insurance's insurance revenue in the first quarter, the company said.
Gross written premiums rose 7.8% to $631.7 million and the company's insurance revenue rose by almost 25% to $422 million in the period.
The Bermuda-based re/insurer, which does not release net income figures in its trading statement, affirmed its earlier guidance that its undiscounted combined ratio would be in the mid-80% range its return on investment would be about 20%.
The improvement insurance revenue was driven by a 30% improvement in reinsurance which rose from $155.1 million to $201.8 million while in the insurance segment, revenue was up almost 20% to $220 million from $183.6 million.
Lancashire chief executive officer Alex Maloney said: “Lancashire has had a very strong start to 2024, reporting a record quarter.
"We continue to see strong opportunities for profitable growth across our portfolio with a Group Renewal Price Index 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. We are very pleased with the strong team we have built and we believe that there are significant long-term opportunities for Lancashire in this market."
Maloney said the market impact of the Baltimore bridge disaster were still being assessed, but the company's potential exposure was within its expectations for an event of this type."
He said the company's investment portfolio delivered a positive return of 0.9% for the quarter while the market yield of 5.4% was offset by mark to market movements on fixed maturities.
He 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.”
Lancashire said the most significant contributor to growth in the reinsurance segment was in property reinsurance. However, the company's renewals were flat in the casualty reinsurance class and there were some exposure reductions on contracts written in prior years.
In the insurance segment, property was also the main driver, helped by the new US operation. The increases were "somewhat offset" by exposure decreases.
Lancashire said: "Growth was more substantial for insurance revenue than gross premiums written as we continue to benefit from earnings coming through from prior underwriting years. Gross premium earned, which is a major driver of insurance revenue, as a percentage of gross premiums written was 76.6% for the first quarter of 2024 compared to 69.1% in 2023. This increase was largely driven by the casualty treaty book."
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