Lancashire (LRE) Q3 2024 TU earnings summary

Executive summary

• Gross premiums written rose 9% year-over-year to $1.7 billion, with a Group Renewal Price Index (RPI) of 102%.

• Insurance revenue increased 16.8% year-over-year to $1.3 billion, driven by both reinsurance and insurance segments.

• Special dividend of $0.75 per share declared, reflecting strong operating performance and robust capital position.

• Net losses from recent weather and catastrophe events, including several hurricanes and storms, are estimated at $110M–$140M.

• Investment portfolio delivered a 5% return year-to-date, with managed investments reaching $3.2 billion and a conservative AA- rating.

Financial highlights

• Reinsurance gross premiums written up 12.4% to $941.2 million; insurance up 5.1% to $758.8 million.

• Net losses from large risk events totaled $72.8 million, with the Baltimore bridge collision being the most significant.

• Book yield on investments increased to 4.8% from 3.9% year-over-year; market yield at 4.7%.

• Total investment portfolio and managed cash stood at $3,207.2 million as of 30 September 2024.

• ROE expected at the top end of guidance, supported by better other income and investment returns.

Outlook and guidance

• Combined ratio expected at the higher end of the target range due to elevated catastrophe losses.

• Full-year ROE guidance affirmed, with strong capital position to support anticipated growth in 2025.

• Growth anticipated in 2025, with expansion in the U.S. and organic growth from established teams.

• Year-on-year growth rate in 2025 likely to be lower than 2024, with more concrete guidance to be provided next quarter.

• Disciplined underwriting and portfolio optimisation to mitigate weaker years.