Bermuda-based re/insurer Lancashire Holdings Limited reported a significant increase in gross premiums for the first three quarters of 2023, with a year-on-year rise of 23.2% to $1.6 billion. The company also noted a 22.1% increase in IFRS 17 insurance revenue, reaching $1.1 billion, according to announcements made Today.
The reinsurance segment contributed notably to this growth, supplying $837.7 million, while the insurance sector accounted for $722.2 million. This expansion was largely influenced by the growth of casualty reinsurance lines and new business from the specialty reinsurance class in a favorable rating environment, leading to an RPI of 123%.
The insurance segment's growth was primarily propelled by property insurance due to rate increases in the property direct and facultative class and the continued expansion of the property construction book of business. Further growth was observed in the political risk class in specialty insurance, with the energy and marine sectors experiencing growth across underwriting platforms due to positive market conditions.
Despite encountering natural catastrophe loss activity during the first nine months of 2023 from various events including U.S. wind and convective storms, Hawaiian wildfires, Turkey earthquake, hurricane Idalia, and New Zealand cyclones and flooding, Lancashire demonstrated resilience.
CEO Alex Maloney highlighted their successful strategy implementation, robust profitable growth, and strong capital position, and approved a capital return of up to $169 million through special dividends and share buy-backs. Maloney also pointed to the company's diversified product portfolio as a key factor behind their success, noting a total net investment return of 2.8%.
In addition to its financial performance, Lancashire also disclosed plans for expanding its US operations. The underwriting launch for Lancashire Insurance U.S. is expected in early 2024.
In leadership news, the company announced that Peter Clarke, the long-serving Chairman, will retire after the annual general meeting on May 1, 2024. Philip Broadley, who has extensive experience at AstraZeneca (NASDAQ:AZN), Legal & General Group, Prudential, and Old Mutual, has been appointed to take over his role.
InvestingPro Insights
Drawing from InvestingPro's real-time data and expert tips, it's clear that Lancashire's strong performance isn't an anomaly. The company's revenue growth has been accelerating, a trend that aligns well with the reported 23.2% increase in gross premiums for the first three quarters of 2023. This is a positive sign for investors and the company's future growth prospects.
InvestingPro Tips also highlights Lancashire's consistent dividend payments, having maintained them for 16 consecutive years. This steady return on investment, coupled with the CEO's announcement of a capital return of up to $169 million through special dividends and share buy-backs, showcases the company's strong earnings and commitment to its shareholders.
Finally, InvestingPro data suggests that Lancashire's net income is expected to grow this year, which correlates with the company's robust growth and the positive rating environment that has been driving its expansion.
Investors seeking more insights can find an additional four tips related to Lancashire on the InvestingPro platform, providing a comprehensive view of the company's financial health and future prospects.
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