Lancashire puts Ukraine loss estimate at $20m-$30m
Lancashire estimates that its ultimate net losses incurred within Ukraine are in the range of $20 million to $30 million, excluding the impact of reinstatement premiums. Its loss estimates for Ukraine and potential losses in Russia will “continue to be assessed” as the conflict and the implications of sanctions evolve, it said in a statement accompanying its first-quarter financial results.
Lancashire’s gross written premium increased by 34.7% year-on-year to $478 million from $355 million, helped by new business in casualty reinsurance, it said.
“Lancashire continues to be shocked and saddened by the tragic human costs and wider destructive impacts of the conflict in Ukraine,” Alex Maloney, group CEO, said.
While the company continues to analyse its potential exposure scenarios in Russia, it considers that any potential losses would be within its risk tolerances, and would not impact its ability to deliver on its growth plans for 2022.
Against this backdrop, underlying trading conditions remain favourable, it said, and Lancashire has continued to deliver strong premium growth in the first quarter. In light of the potential for broader market dislocation, we remain confident that our strong balance sheet, robust capital position and talented underwriting teams, will give us further opportunities for profitable growth during 2022.”
Equity analysts Jefferies said it viewed Lancashire's Q1 trading update as “reassuring”.
“Ultimate net losses from the conflict within Ukraine are in the range of $20 million-30 million, with immaterial claims paid/notified so far,” Jefferies said in a research note. “On Russia, where there has been particular concern from the market regarding aviation insurance losses , Lancashire considers any potential losses would be within risk tolerances and not impact the company's growth ambitions in 2022. Lancashire's earnings credit rate ratio of 255% (as at 31 December 2021) also remains robust, and +35% growth in Q1 shows a strong sign of confidence, in our view.”
Lancashire Holdings also said on Thursday that, after nine years’ service, Samantha Hoe-Richardson had stepped down from its board at the conclusion of the 2022 AGM. Upon Hoe-Richardson’s retirement, Sally Williams has taken over as chair of the audit committee. The company also announced that, as Simon Fraser is approaching the end of his nine years’ service on the board, he has stepped down as chair of the remuneration committee. Irene McDermott Brown has taken over that role.
