Specialty insurance and reinsurance group Lancashire Holdings continued to grow in the first half of 2023 on the back of strong growth last year, with gross premiums written (GPW) up more than 26% to almost $1.2 billion on the back of expansion in property business amid substantial rate increases.
Overall, growth slowed somewhat from the 35% rise in GPW Lancashire recorded in 2022, but remained strong as the Bermuda-based firm continues to take advantage of current dynamics and grow when market conditions are favourable.
Premiums increased in both the insurance and reinsurance business, to $526 million and $658 million, respectively, compared with $389 million and $549 million in the prior year period.
In its reinsurance segment, Lancashire highlights the “benefit of significant rate increases contributing to growth” in property, with a substantial driver of the overall reinsurance premium expansion coming from the continued build out of its casualty reinsurance operation, and new business written in specialty reinsurance.
During H1 2023, reinsurance saw the best price increases with Lancashire reporting a renewal price index (RPI) of 123% in the segment, compared with 107% in H1 2022.
Within the insurance business, premium growth was also driven by property with substantial rate increases benefiting the property direct and facultative lines. Growth also occurred in energy and marine, while the firm wrote more political risk business than the prior year. In insurance, the RPI was also strong at 111%, up from 105% a year earlier.
All in all, premium growth across the business occurred at a RPI of 117% compared with 106% in the prior year.
The continued growth trajectory at Lancashire in the first half of the year comes alongside a rise in insurance revenue to $721 million, a higher underwriting profit of $189 million, and a positive investment result of $63 million.
Profit after tax rose from $31 million in H1 2022 to $159 million in H1 2023 for the company.
“We are very pleased with our performance in the first half of 2023. Our long-term strategy to develop a more diversified and capital-efficient product portfolio is delivering the expected benefits, with a half year change in diluted book value per share of 12.2%,” said Alex Maloney, Group Chief Executive Officer.
“Our philosophy has always been to grow when market conditions are favourable, while maintaining our approach to underwriting discipline. During the first six months of 2023 we continued to take advantage of the strong underwriting environment with gross premiums written increasing 26.2% year-on-year. The undiscounted combined ratio was a healthy 79.2%, or 71.4% on a discounted basis.
“The rating environment remains positive across our product lines and we do not see that changing during the remainder of the year,” he added.