Lancashire (LRE) H1 2025 earnings summary

Executive summary

• Profit after tax reached $109.2 million for H1 2025, reflecting strong resilience despite significant industry losses from California wildfires.

• Gross premiums written rose 5.8% year-over-year to $1,356.2 million; insurance revenue increased 8.9% to $930.1 million.

• Discounted combined ratio was 87.4%, with an undiscounted combined ratio of 97.8%.

• Total investment return was 3.7%, supported by higher yields and positive currency effects.

• Upgraded 2025 ROE guidance to high-teens, assuming a similar loss environment in H2.

Financial highlights

• Insurance service result was $155.7 million, with a net insurance and investment result of $207.2 million.

• Net investment return increased to $108.2 million from $75.2 million year-over-year.

• Interim dividend of $0.075 per share declared, totaling $18.0 million.

• Operating expense ratio: 8.8% (up from 7.8% in 2024), mainly due to increased headcount.

• Paid $96.5 million in regular and special dividends during the period.

Outlook and guidance

• 2025 ROE now expected in the high-teens, upgraded from mid-teens, if H2 loss environment mirrors 2024.

• Premiums written expected to grow at low single digits for the full year.

• Strong balance sheet and conservative capital base support growth and shareholder returns.

• Capital returns to be assessed post-wind season, with a process similar to prior years.

• Continued focus on disciplined underwriting and capital management.