Lancashire Holdings Limited · LSE:LRE
Lancashire — Q3 2022 Earnings Presentation
24 slides from Lancashire's earnings presentation, 2022
Slide 1: Investor presentation Q3 2022 update
Investor presentation Q3 2022 update www.lancashiregroup.com
Slide 2: Safe harbour statements
Safe harbour statements NOTE REGARDING ALTERNATIVE PERFORMANCE MEASURES: CERTAIN STATEMENTS AND INDICATIVE PROJECTIONS (WHICH MAY INCLUDE MODELLED LOSS SCENARIOS) MADE IN THIS RELEASE OR OTHERWISE THAT ARE NOT BASED ON CURRENT OR The Group uses alternative performance measures to help explain HISTOR
Slide 3: Contents
Contents Q3 2022 Q3 2022 Q3 2022 Loss environment Q3 update Business update Q3 2022 Q3 2022 Q3 2022 Investments Outlook Appendix Investor Presentation Q3 2022 Update I lancashiregroup.com 3
Slide 4: Q3 2022 Update
Q3 2022 Q3 2022 Update Investor Presentation Q3 2022 Update I lancashiregroup.com 4
Slide 5: Q3 2022 Update: Strong growth, with underwriting performance supported by diversification
Q3 2022 Update Strong growth, with underwriting performance supported by diversification • Strong growth, with gross premiums written increasing by 34.3% year-on-year to $1.3 billion. • Diversified portfolio adding additional underwriting resilience. • Group Renewal Price Index (RPI) of 107%. • Rati
Slide 6: Business update
Q3 2022 Business update Investor Presentation Q3 2022 Update I lancashiregroup.com 6
Slide 7: Strong premium growth in Q3 2022
Strong premium growth in Q3 2022 Gross premiums written ($m) and cumulative RPI for the first nine months: 2018 to 2022 Total $1,400 150% $1,200 140% $1,000 130% $800 120% $600 GPW increased by $400 110% 34.3% year-on-year; Group RPI 107% 100% $200 $0 90% 2018 2019 2020 2021 2022 Investor Presentati
Slide 8: Strong premium growth in Q3 2022
Strong premium growth in Q3 2022 Gross premiums written ($m) and cumulative RPI for the first nine months: 2018 to 2022 Property and casualty reinsurance Property and casualty insurance Aviation $800 150% $250 150% $100 180% $700 $90 170% 140% $200 140% $80 $600 160% $70 130% 130% 150% $500 $150 $60
Slide 9: Strong premium growth in Q3 2022
Strong premium growth in Q3 2022 Gross premiums written ($m) and cumulative RPI for the first nine months : 2018 to 2022 Energy Marine $180 150% $100 160% $160 $90 140% 150% $140 $80 $70 140% $120 130% $60 130% $100 120% $50 $80 120% $40 $60 110% $30 110% $40 $20 100% 100% $20 $10 $0 90% $0 90% 2018
Slide 10: Loss environment
Q3 2022 Loss environment Investor Presentation Q3 2022 Update I lancashiregroup.com 10
Slide 11: Q3 2022 loss environment
Q3 2022 loss environment • Estimated ultimate net losses incurred in relation to hurricane Ian, excluding the impact of reinstatement premiums and Lancashire • No change to our reserving approach. Capital Management, are within the range of $160 million to $190 million. Investor Presentation Q3 2022
Slide 12: Investments: conservative portfolio structure – quality focus
Investments: conservative portfolio structure – quality focus Asset Allocation Credit Quality total investment portfolio and managed cash fixed maturities and managed cash Private investment funds Other government bonds and debt 4% 2% Hedge Funds 4% Index Linked Securities AA, 42% 1% A, 22% US gover
Slide 13: Remaining Strongly Capitalised
Remaining Strongly Capitalised Increase Decrease Note: The Q2 2022 BSCR Coverage Ratio is as submitted to the BMA and is calculated on a best effort basis. The Q3 2022 impact includes our Q3 losses plus other changes in shareholders’ equity. The Q3 BSCR Coverage Ratio is estimated and not the final
Slide 14: 2022 guidance
2022 guidance Guidance 2021 Achieved 2021 Guidance FY 2022 GPW contribution from new teams $40m - $60m $95m $50m - $60m Attritional loss ratio 35% - 40% 36% 33% - 37% Reserve releases $40m - $60m $86.5m $70m - $80m broadly the same as Acquisition cost ratio 1-2%pt benefit vs 2020 1.7%pt benefit 2021
Slide 15: Outlook
Q3 2022 Outlook Investor Presentation Q3 2022 Update I lancashiregroup.com 15
Slide 16: Outlook: positioned for growth
Outlook: positioned for growth • We remain strongly capitalised to deliver on our long-term strategy. We continue to navigate the insurance cycle and manage the business for the There is no change to our long long term. term strategy. • Our franchise has strengthened and is more resilient. We contin
Slide 17: Appendix
Q3 2022 Appendix Investor Presentation Q3 2022 Update I lancashiregroup.com 17
Slide 18: Managing our catastrophe exposure
Managing our catastrophe exposure (1) PML loading factor vs Peers Lancashire BMA Mean • Most conservative frequency approach is used • Continuing to take rate in our catastrophe exposed lines. for Atlantic windstorm modelling. • Growth of non-cat lines over the past few years continues to bear fruit
Slide 19: Changes to Business Mix
Changes to Business Mix Proportion of catastrophe-exposed GPW 2017 100% GPW by level of attritional losses 90% 80% 70% Low 60% 50% Low attrition 40% 30% 20% High 10% 0% High attrition Cat Non Cat 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 est Property cat Tr
Slide 20: Claims inflation
Claims inflation • We have a good track • Clients provide regularly • Catastrophe modelling record of managing updated schedules of includes (our) inflation inflationary pressures, insured values where loading. e.g. the impact of oil price required. • A weak relationship in our energy book • Premium
Slide 21: ESG themes
ESG themes Responsible investment Demonstrating our commitment to ESG through management of investments. Operating responsibly Running our business as a good corporate citizen, a responsible preserver of resources, and engaging OUR constructively with all our stakeholders to the benefit ESG of socie
Slide 22: Our ESG journey
Our ESG journey People and culture Operating responsibly • 2021 employee survey score of 88% (+3% on 2019) • Member of ClimateWise • Named ‘Top 10 Employer’ in Bermuda in October 2021 • Climate Change Working Group and ESG Committee established in 2021 • Active programme to develop internal talent i
Slide 23: Lancashire Foundation
Lancashire Foundation • We believe that the success of the Foundation in making a real difference to the lives of those less fortunate is due to the enthusiasm of our people. Our focus in 2022 has been to • Since the first donation in 2007, the Foundation has given more than $22 million to charitabl
Slide 24: For more information
For more information Investor Relations Media Jelena Bjelanovic FTI Consulting Peter Krinks Lancashire Holdings Limited 200 Aldersgate, Lancashire Holdings Limited 29th Floor, Aldersgate Street, 29th Floor, 20 Fenchurch Street, London, EC1A 4HD 20 Fenchurch Street, London, EC3M 3BY E Tom.Blackwell@f