Lancashire outlook upgraded to stable
Ratings agency AM Best has upgraded its outlook for re/insurer Lancashire Holdings, crediting its strong operating performance following execution of a diversification strategy which reduced earnings volatility.
AM Best upgraded the Bermuda-based specialty re/insurer’s outlook from negative to stable and affirmed its A (Excellent) financial strength rating. Lancashire is headed by group CEO Alex Maloney.
The ratings agency said: “Also reflected in the ratings is Lancashire’s historically strong overall operating performance, driven by underwriting results in non-catastrophe-affected years and complemented by investment income and fee income.
“As of September 2023, Lancashire has exhibited a strong operating performance resuming prior years’ trends, which has led to this revision of the negative outlook on the Long-Term ICR to stable. This reflects the dampening effect that its diversification strategy has on the volatility of its underwriting results.”
AM Best assessed Lancashire’s balance sheet strength as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).
“In addition to the strongest level of risk-adjusted capitalization, the assessment of balance sheet strength is supported by the group’s financial flexibility and history of prudent reserving,” AM Best said.
“Lancashire is a specialty underwriter with a good degree of geographic and product line diversification, as the company’s offerings include primary insurance, reinsurance and retrocessional coverages written on a global basis through traditional capacity, Lloyd’s and its Kinesis platform,” the agency added.
