Lancashire Holdings Limited · LSE:LRE
Lancashire — Q3 2021 Earnings Presentation
16 slides from Lancashire's earnings presentation, 2021
Slide 1: Investor Presentation Q3 2021 Update
Investor Presentation Q3 2021 Update www.lancashiregroup.com
Slide 2: Safe harbor statements
Safe harbor statements NOTE REGARDING FORWARD-LOOKING STATEMENTS: CERTAIN STATEMENTS AND INDICATIVE PROJECTIONS (WHICH MAY INCLUDE MODELLED LOSS SCENARIOS) MADE IN THIS PRESENTATION OR OTHERWISE THAT ARE NOT BASED ON CURRENT OR HISTORICAL FACTS ARE FORWARD-LOOKING IN NATURE INCLUDING, WITHOUT LIMITA
Slide 3: Q3 YTD 2021 highlights
Q3 YTD 2021 highlights • Strongest YTD for gross premium written since inception, supported by the rate environment • GPW increased by 46.9% year-on-year to $967.7 million and Group RPI of 110%. • Lancashire’s strategy to write more business and deploy more capital when market conditions are favoura
Slide 4: Strong premium growth Q3 YTD in 2021
Strong premium growth Q3 YTD in 2021 Gross premiums written ($m) and cumulative RPI for the first three quarters of 2017 to 2021 Total Property and casualty reinsurance Property and casualty insurance $1,200 150% $600 150% $200 150% $1,000 140% $500 140% 140% $150 $800 130% $400 130% 130% $600 120%
Slide 5: Q3 YTD 2021 loss environment
Q3 YTD 2021 loss environment • Active Q3 loss environment – pre-announced losses in line with our tolerances and expectations for such events • Estimated $165 million to $185 million of net ultimate losses from hurricane Ida and European storms Bernd, Volker and Xero. • Risk loss related to the poli
Slide 6: Strongly capitalised to take advantage of the improving market
Strongly capitalised to take advantage of the improving market • Strong regulatory position, with a BSCR Coverage Ratio of 246% at 30 June 2021. • Q2 BSCR Coverage Ratio includes the impact of the debt raise somewhat offset by premium growth. • Meaningful headroom to fund further growth in 2021 and
Slide 7: Investments: conservative portfolio structure – quality focus
Investments: conservative portfolio structure – quality focus Asset Allocation Credit Quality total investment portfolio and fixed maturities and managed cash managed cash Corporate and other loans 5% Managed cash and short term Alternative investments 11% 10% A, 28% AA, 39% Structured products Sove
Slide 8: Outlook - positioned for growth
Outlook - positioned for growth • We remain strongly capitalised to deliver on our strategy. We continue to navigate the insurance cycle, manage the business for the long term, ignore the herd and be bold when we see true opportunity. • Our franchise has strengthened and is more resilient. We contin
Slide 9: APPENDIX
APPENDIX www.lancashiregroup.com
Slide 10: Changing business mix drives changes in the attritional loss ratio
Changing business mix drives changes in the attritional loss ratio • When Lancashire began writing business in 2005/6 around 80% of our premiums related to low attrition/high volatility risk exposure. • As we integrated Lancashire Syndicates from 2014, the low attrition/high volatility exposure prem
Slide 11: Business mix benefits
Business mix benefits • The relative loss ratio split between attritional/large/catastrophe varies by business line. • More attritional business generally has a lower capital requirement. The underlying combined ratio may be higher than catastrophe business, but the return on capital is positive and
Slide 12: Claims inflation is not a major concern for Lancashire
Claims inflation is not a major concern for Lancashire • We write a predominantly short-tail book, with the bulk of our policies renewing every year. • Policies renew through the year, not just on January 1st. • Clients provide regularly updated schedules of insured values where required. • Catastro
Slide 13: Our approach to capital
Our approach to capital • Two of our three long-stated strategic priorities relate to capital: Effectively Balance Risk and Return and Operate Nimbly Through the Cycle • We have a track record of active capital management, returning or raising capital where appropriate given expected underwriting re
Slide 14: Maintaining a strong capital position
Maintaining a strong capital position • We maintain a conservative capital position such that we can withstand a significant catastrophe event and still retain our ratings and regulatory solvency position. • Our key capital driver is the AM Best ‘cat stress’ model, which is more penal than the publi
Slide 15: ESG - a central part of our strategy
ESG - a central part of our strategy Environmental & Social Environmental • Societal resilience through the • Monitoring and management of provision of insurance products catastrophe exposures to aid recovery from natural • Low carbon emissions per employee catastrophe and man-made • Own operations
Slide 16: For more information:
For more information: Investor Relations Media Contacts Jelena Bjelanovic FTI Consulting Lancashire Holdings Limited 200 Aldersgate, 29th Floor, Aldersgate Street, 20 Fenchurch Street, London, EC1A 4HD London, EC3M 3BY Telephone: +44 (0) 20 7264 4066 Email: Tom.Blackwell@fticonsulting.com Fax: +44 (