Lancashire Holdings Limited · LSE:LRE
Lancashire — H1 2022 Earnings Presentation
25 slides from Lancashire's earnings presentation, 2022
Slide 1: Investor presentation H1 2022 update
Investor presentation H1 2022 update www.lancashiregroup.com
Slide 2: Safe harbour statements
Safe harbour statements NOTE REGARDING FORWARD-LOOKING STATEMENTS: NOTE REGARDING ALTERNATIVE PERFORMANCE MEASURES: CERTAIN STATEMENTS AND INDICATIVE PROJECTIONS (WHICH MAY INCLUDE The Group uses alternative performance measures to help explain MODELLED LOSS SCENARIOS) MADE IN THIS PRESENTATION OR O
Slide 3: Contents
Contents H1 2022 H1 2022 H1 2022 Loss environment H1 Update Business Update H1 2022 H1 2022 H1 2022 Investments Outlook Appendix Investor Presentation H1 2022 Update I lancashiregroup.com 3
Slide 4: H1 2022 Update
H1 2022 H1 2022 Update Investor Presentation H1 2022 Update I lancashiregroup.com 4
Slide 5: H1 2022 Update: Excellent underwriting performance in H1
H1 2022 Update Excellent underwriting performance in H1, supported by newer classes of business • Excellent underwriting performance with gross premiums written increasing by 34.6% year-on-year to $938.1 million and combined ratio of 78.2%. • Group Renewal Price Index (RPI) of 106%, rate environment
Slide 6: Business update
H1 2022 Business update Investor Presentation H1 2022 Update I lancashiregroup.com 6
Slide 7: Strong premium growth in H1 2022
Strong premium growth in H1 2022 Gross premiums written ($m) and cumulative RPI for first half: 2018 to 2022 Total $1,000 150% $900 140% $800 $700 130% $600 $500 120% $400 $300 110% GPW increased by 34.6% year-on-year; $200 100% Group RPI 106% $100 $0 90% 2018 2019 2020 2021 2022 Investor Presentati
Slide 8: Strong premium growth in H1 2022
Strong premium growth in H1 2022 Gross premiums written ($m) and cumulative RPI for first half: 2018 to 2022 Property and casualty reinsurance Property and casualty insurance Aviation $600 150% $160 150% $70 170% $140 $60 160% $500 140% 140% $120 150% $50 $400 130% 130% $100 140% $40 $300 120% $80 1
Slide 9: Strong premium growth in H1 2022
Strong premium growth in H1 2022 Gross premiums written ($m) and cumulative RPI for first half: 2018 to 2022 Energy Marine $140 150% $80 150% $120 $70 140% 140% $100 $60 130% 130% $50 $80 120% $40 120% $60 $30 110% 110% $40 $20 $20 100% 100% $10 $0 90% $0 90% 2018 2019 2020 2021 2022 2018 2019 2020
Slide 10: 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 11: Claims inflation is not a major concern for Lancashire
Claims inflation is not a major concern for Lancashire • We have a good track record of managing inflationary • If we do not feel declared values adequately cater for pressures, e.g. the impact of oil price in our energy book inflation we manually load. • We write a predominantly short-tail book, wi
Slide 12: Financial Results
H1 2022 Financial Results Investor Presentation H1 2022 Update I lancashiregroup.com 12
Slide 13: H1 2022 Financial Results
H1 2022 Financial Results Six months Six months Twelve months 2022 2021 2021 $m $m $m Gross premiums written 938.1 697.2 1,225.2 Net premiums written 622.6 427.9 816.1 Net premiums earned 440.5 315.3 696.5 Underwriting profit 164.5 127.1 69.0 Profit (loss) before tax 78.0 54.1 (56.8) Other comprehen
Slide 14: H1 2022 loss environment
H1 2022 loss environment • Excellent underwriting performance with combined ratio of 78.2%. • Ultimate net loss estimates from the conflict incurred within Ukraine of $22.0 million. All H1 losses within risk tolerances and • Other losses in H1 include flooding in Australia & South Africa and some Ac
Slide 15: 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 16: 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 Other government Private investment bonds and debt funds 2% 5% Hedge Funds 4% AA, 44% Index Linked Securities A, 22% 1% US gover
Slide 17: Remaining Strongly Capitalised
Remaining Strongly Capitalised Increase Decrease Regulatory ECR ratio of approximately 270% as at 30 June 2022. We retain meaningful regulatory headroom to fund further growth. Applying a stress scenario which incorporates a net loss cat event (representative of our 1 in 100 Gulf of Mexico wind PML
Slide 18: 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 19: Outlook
H1 2022 Outlook Investor Presentation H1 2022 Update I lancashiregroup.com 19
Slide 20: Outlook: positioned for growth
Outlook: positioned for growth • We remain strongly capitalised to deliver on our long-term strategy. We There is no change to our long continue to navigate the insurance cycle and manage the business for the term strategy. long term Disciplined growth is important • Our franchise has strengthened a
Slide 21: Appendix
H1 2022 Appendix Investor Presentation H1 2022 Update I lancashiregroup.com 21
Slide 22: 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 23: Our ESG journey
Our ESG journey People and culture Operating responsibly • 2021 employee survey score of 88% (+3% on 2019) • Member of ClimateWise during H1 2022 • Named ‘Top 10 Employer’ in Bermuda in October 2021 • Climate Change Working Group and ESG Committee established in 2021 • Active programme to develop in
Slide 24: 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. Nearly $250,000 donated to • Since the first donation in 2007, the Foundation has given more than $22 million to charitable l
Slide 25: 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