Lancashire Holdings Limited · LSE:LRE
Lancashire — FY2022 Earnings Presentation
24 slides from Lancashire's earnings presentation, 2023
Slide 1: Investor Presentation Year-End 2022: Strong forward momentum
Investor Presentation Year-End 2022 Strong forward momentum I 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 The Group uses alternative performance measures to help explain include modelled loss scenarios) made in this presentation busi
Slide 3: Contents
Contents Highlights Financials Outlook Appendix Investor Presentation 2022 Update I lancashiregroup.com 3
Slide 4: Highlights
Highlights Investor Presentation 2022 Update I lancashiregroup.com 4
Slide 5: 2022 highlights
2022 highlights Strong premium growth and diversification drives underwriting profit in a volatile year • Gross premiums written increased by 35% year-on-year to $1.7 billion and Group RPI of 108% • In the five years since 2017, gross premiums written increased by almost 280% • Combined ratio of 97.
Slide 6: Strong premium growth in 2022
Strong premium growth in 2022 Gross premiums written ($m) and cumulative RPI (%) for the years ended: 2018 to 2022 $1,800 150% Delivering on our strategy to grow and diversify $1,600 145% our underwriting footprint to maximise the $1,400 140% market opportunity 135% $1,200 130% $1,000 125% $800 120%
Slide 7: Strong premium growth in 2022: Reinsurance segment
Strong premium growth in 2022 Gross premiums written ($m) and cumulative RPI (%) for the years ended: 2018 to 2022 Reinsurance segment 900 140% • 50% premium growth and an RPI of 108% 800 135% in 2022. 700 130% • Build out of casualty reinsurance whilst 600 applying a prudent reserving approach. 125
Slide 8: Strong premium growth in 2022: Insurance segment
Strong premium growth in 2022 Gross premiums written ($m) and cumulative RPI (%) for the years ended: 2018 to 2022 • 22% premium growth in this segment and Insurance segment an RPI of 108% in 2022. $900 160% • Aviation insurance had an RPI of 118%, $800 the highest across our portfolio for the 150%
Slide 9: Financials
Financials Investor Presentation 2022 Update I lancashiregroup.com 9
Slide 10: 2022 Financial Results Update
2022 Financial Results Investor Presentation 2022 Update 10
Slide 11: 2022 loss environment
2022 loss environment Conflict in Ukraine • $22 million previously set aside for direct claims emanating from the conflict in • Catastrophe, weather related and large single risk Accident Year PY Development ($m) Ukraine. losses for the year, excluding the impacts of 2017 AY and prior 19.9 • In Q4,
Slide 12: Underlying combined ratio
Underlying combined ratio Underlying combined ratio 95% 90% 85% 80% 75% 70% 2017 2018 2019 2020 2021 2022 • The underlying combined ratio, excluding cat and large losses and reserve releases, has remained broadly unchanged from the prior year. • Increase from 2021 is primarily due to business mix. E
Slide 13: Improved ability to absorb cat losses
Improved ability to absorb cat losses 140% 250 1000 120% 900 200 800 100% 700 80% 150 600 500 60% 100 400 40% 300 50 200 20% 100 0 0% 0 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 Combined ratio % Net cat losses $m Net earned premium $m Net cat losses $m • Our premium growth in non-c
Slide 14: Investments: conservative portfolio structure – quality focus
Investments: conservative portfolio structure – quality focus Asset Allocation Credit Quality total investment portfolio and managed cash fixed maturities and managed cash Private investment funds 4% Other government bonds and debt Hedge Funds AA, 41% 3% 4% Index Linked Securities 1% A, 21% US gover
Slide 15: Remaining Strongly Capitalised
Remaining Strongly Capitalised Increase Decrease Note: The Q4 BSCR Coverage Ratio is estimated and not the final result. We expect to provide the final Q4 2022 regulatory position at the Q1 earnings call. Applying a stress scenario which incorporates a net loss catastrophe event (representative of o
Slide 16: Outlook
Outlook Investor Presentation 2022 Update I lancashiregroup.com 16
Slide 17: Outlook: positioned for growth
Outlook: positioned for growth • We remain strongly capitalised to deliver on our long-term strategy. We continue to navigate the insurance cycle and manage the business for the There is no change to our long long term. term strategy. • Our franchise has strengthened and is more resilient. We contin
Slide 18: Appendix
Appendix Investor Presentation 2022 Update I lancashiregroup.com 18
Slide 19: Claims inflation
Claims inflation • We have a good track • Clients provide regularly • Catastrophe modelling record of managing updated schedules of includes (our) inflation inflationary pressures, insured values where loading. e.g. the impact of oil price required. • A weak relationship in our energy book • Premium
Slide 20: Strong premium growth in Q4 2022 – old segmentation basis
Strong premium growth in Q4 2022 – For comparison on the old segmentation basis Gross premiums written ($m) and cumulative RPI for the years ended: 2018 to 2022 Property and casualty reinsurance Property and casualty insurance Aviation $900 150% $350 150% $200 190% $800 180% 140% $300 140% $700 170%
Slide 21: 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% Hi g h attrition Cat Non Cat 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Property cat Trad
Slide 22: Progress on our ESG journey
Progress on our ESG journey People and culture Operating responsibly Giving our people the environment, tools, skills and support they need to thrive in an open, honest and diverse culture. Running our business as a good corporate citizen, a responsible preserver of resources, and holding Progress o
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 • $0.6 million donated to charitable organisations in 2022. support organisations with an empha
Slide 24: For more information
For more information Investor Relations Media FTI Consulting Jelena Bjelanovic Peter Krinks 200 Aldersgate, Lancashire Holdings Limited Lancashire Holdings Limited Aldersgate Street, 29th Floor, 29th Floor, 20 Fenchurch Street, 20 Fenchurch Street, London, EC1A 4HD E Tom.Blackwell@fticonsulting.com