Gross written premiums up but profit down for Lancashire Holdings in H1
Lancashire Holdings saw its gross written premiums increase in the first half of 2019 compared with the same period last year, while profit slumped.
Lancashire Holdings reported gross written premiums written worth $429.6 million in the first half of 2019, up from the $392.5 million written in H1 2018.
But its net operating profit was down in the six months ended June 30, to $42.9 million, from $78.3 million in the same period of 2018. That translated to a fall in its profit after tax to $39.1 million, from $75.8 million in H1 2018.
Its combined ratio fell to 86.6 percent in H1 2019, from 67.1 percent in H1 2018.
Alex Maloney, the chief executive officer of Lancashire Holdings, said he was encouraged by evidence that the re/insurance market is finally seeing an improvement in discipline and pricing in many of Lancashire’s core business lines.
“In the face of a more cautious underwriting environment and evidence of market retrenchment in the specialty lines in which we write, we were able to take advantage of improving terms and demand,” said Maloney. “While the market overall was characterised by a number of attritional losses in the first half of 2019 and substantial loss creep on prior year events, it is worth noting that our ultimate net loss estimates for the 2018 and 2017 catastrophe events have remained largely stable.”
Elaine Whelan, the chief financial officer, said that Lancashire had experienced some adverse development on the 2018 accident year due to some late reported claims, but pointed to an overall net favourable development on prior accident years.
She stressed renewals had been in line with expectations, individual business lines had experienced growth and that Lancashire remains well capitalised.
Whelan added: “Our investment strategy remains relatively conservative and our investment portfolio performed well with a net return of 3.2 percent. With expectations of interest rate reductions going forward, we have removed some of our interest rate hedges and that has led to a natural increase in the duration of our investment portfolio.”