Lancashire Holdings Limited Achieves Robust Financial Results in 2024
Bermuda-based Lancashire Holdings Limited reported a commendable profit after tax of $321.3 million for the year 2024, mirroring the previous year’s performance, with a solid combined ratio of 80%. This success was driven by the firm’s proficient insurance and reinsurance operations.
Across the Group, gross premiums written (GPW) increased by 11% year over year, totaling $2.149 billion. Meanwhile, insurance revenue surged by 16% to $1.765 billion, compared to $1.519 billion in 2023.
The company’s insurance service result for 2024 amounted to $379.9 million, reflecting a slight 1% decrease compared to the prior year. Simultaneously, net investment income experienced a modest increase of 1%, reaching $162.2 million.
However, the Group’s loss ratio rose to 71.3% from 65.1% in 2023, while the combined ratio worsened to 80% from 74.9%. The undiscounted combined ratio was recorded at 89.1% for 2024, up from 82.6% in the previous year.
Reinsurance premiums allocation saw an increment of $14.6 million, or 3.4%, in 2024, amounting to $439.4 million. As a percentage of the Group’s insurance revenue, this was 24.9%, a decrease from 27.9% in the prior year.
Catastrophe and Large Loss Events Impact
In 2024, Lancashire faced net losses from catastrophe, weather, and large loss events totaling $214.1 million. Of this, $122.7 million was attributed to catastrophe and weather-related events, with Hurricane Milton being the most significant. Other impactful events included Hurricanes Helene and Debby, storm Boris, and the Calgary hailstorms.
Losses from major risk events amounted to $91.4 million, with the MV Dali Baltimore bridge collision being the most substantial. Despite these losses exceeding 2023’s $106.1 million, Lancashire noted that no single loss was individually material.
Favorable prior accident year loss development was recorded at $121.1 million in 2024, primarily due to attritional loss experience from 2023, along with reserve releases from catastrophe events in 2022 and 2021.
Investment and Segment Growth
Excluding realised and unrealised gains and losses, net investment income reached $144.8 million in 2024, marking a 33.5% increase from 2023. The total investment return for the year was 5%, slightly down from 5.7% in 2023.
Both reinsurance and insurance segments experienced growth in 2024. The reinsurance segment reported GPW of $1.097 billion, up from $967.5 million in 2023, fueled by new business in property reinsurance and specialty lines. The segment’s RPI remained stable at 101%.
The insurance segment saw GPW rise to $1.051 billion from $964.2 million in 2023, driven by increased business in the property class, including contributions from Lancashire US and Australia channels.
Reinsurance revenue increased to $855.1 million from $714.9 million, with the insurance service result climbing to $264.1 million from $207.9 million. Insurance segment revenue reached $910 million in 2024, up from $805 million in 2023, though the service result declined from $174.2 million to $115.8 million.
CEO’s Perspective and Future Outlook
Alex Maloney, Group CEO, remarked, “2024 was another remarkable year for Lancashire, with a stellar profit after tax of $321.3 million and a robust return on equity of 23.4%. In a year marked by significant industry losses, this achievement underscores our strategic execution to capitalize on market conditions, optimize capital use, diversify our portfolio, and attract top talent.”
Maloney highlighted the increase in gross premiums written by 11.3% to over $2.1 billion and a 16.1% rise in insurance revenue to $1.7 billion, attributing these results to a disciplined underwriting approach and a strong investment portfolio returning 5% for the year.
He announced a total capital return of $354.2 million to investors and a declared year-end dividend of $0.40 per share, comprising a final ordinary dividend of $0.15 and a special dividend of $0.25, subject to shareholder approval.
Looking ahead, Maloney noted the impact of the California wildfires in early 2025, expected to range between $145 million and $165 million, and anticipated delivering a mid-teens RoE for the year, reflecting a challenging loss environment. He expressed gratitude to the firm’s clients, brokers, shareholders, and partners for their continued support.
Celebrating its 20th anniversary in 2025, Lancashire looks back on its achievements with pride and forward to future growth opportunities.
