Lancashire Holdings Limited · LSE:LRE
Lancashire — FY2023 Earnings Presentation
20 slides from Lancashire's earnings presentation, Mar 6, 2024
Slide 1: Delivering together. Investor Presentation: Full year 2023 results
Delivering together. Investor Presentation: Full year 2023 results I lancashiregroup.com 1
Slide 2: Safe harbour statements
Safe harbour 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 LIMIT
Slide 3: Contents
Contents 2023 highlights Financials Outlook Full Year 2023 I lancashiregroup.com 3
Slide 4: 2023 highlights
2023 highlights Full Year 2023 I lancashiregroup.com 4
Slide 5: Excellent performance enables further capital returns
Excellent performance enables further capital returns • Profit after tax of $321.5 million resulting in excellent change in DBVS of 24.7%. • 50% increase in ordinary dividend reflecting ongoing resilience of business model. • Additional special dividend of $0.50 per common share following special di
Slide 6: Premium growth and diversification contribute to excellent underwriting result
2023 highlights Premium growth and diversification contribute to excellent underwriting result Gross premiums Insurance revenue Insurance service written increased increased 23.9% to result of $382.1 by 16.9% year-on- $1.5 billion million year to $1.9 billion Combined ratio Group Renewal (undiscount
Slide 7: Focus on writing profitable business
Focus on writing profitable business Gross premiums written ($m) and cumulative RPI (%) for the years ended 2019 to 2023 2,000.0 160% 1,800.0 150% 1,600.0 1,400.0 140% • Gross premiums written increased by 16.9% 1,200.0 year-on-year to $1.9 billion. 1,000.0 130% • Group RPI of 115%. 800.0 • Momentum
Slide 8: Financials
Financials Full Year 2023 I lancashiregroup.com 8
Slide 9: 2023 financial results summary
2023 financial results summary 2023 2022 Variance $m $m $m Insurance revenue 1,519.9 1,226.5 293.4 Insurance service expenses (696.2) (994.6) 298.4 Insurance service result before reinsurance contracts held 823.7 231.9 591.8 Allocation of reinsurance premiums (424.8) (371.8) (53.0) Amounts recoverab
Slide 10: Net claims environment
Net claims environment • Net losses (undiscounted, including reinstatement premiums) from Combined ratio walkthrough catastrophe, weather and large loss events of $106.1 million. 90% 80% 7.7% • Prior year favourable ultimate loss development for the period was ~5% 70% $78.8 million, compared to $134
Slide 11: Discounting
Discounting Insurance contracts Reinsurance contracts Total issued held For the year ended 31 December 2023 $m $m $m • 2023 discount rates relatively high Initial discount included in insurance service result 101.9 (17.2) 84.7 through the year with a small Unwind of discount (84.2) 28.4 (55.8) decre
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 Other government Private investment bonds and debt funds 3% 6% AA, 37% A, 23% US government bonds and agency debt 24% Duration 1
Slide 13: Remaining strongly capitalised
Remaining strongly capitalised Decrease Increase Note: The Q4 BSCR Coverage Ratio is estimated and not the final result. Applying a stress scenario which incorporates a net loss catastrophe event (representative of our 1 in 100 Gulf of Mexico wind PML at $300.5 million) at 31 December 2023 our ECR r
Slide 14: Bermuda Corporate Income Tax Legislation
Bermuda Corporate Income Tax Legislation • New Bermuda Corporate Income Tax rules are effective from 1 January 2025. • Our limited international presence means we currently expect to be excluded from scope for a period of up to five years. • We expect to have deferred tax assets in the future in the
Slide 15: Outlook
Outlook Full Year 2023 I lancashiregroup.com 15
Slide 16: Outlook
Outlook • There is no change to our long-term strategy. 2024 guidance Disciplined growth is important to balance returns over the longer term. This approach to growth will allow Lancashire to mitigate the weaker years through portfolio optimisation and we expect this to enhance returns over the cycl
Slide 17: Appendix
Appendix Full Year 2023 I lancashiregroup.com 17
Slide 18: 2023: Reinsurance segment
2023: Reinsurance segment Gross premiums written ($m) and cumulative RPI (%) for the years ended 2019 to 2023 Reinsurance segment 1,000.0 170% 900.0 160% • Build out of casualty reinsurance lines 800.0 remains the primary driver of growth. 700.0 150% • Strong rating environment for specialty 600.0 1
Slide 19: 2023: Insurance segment
2023: Insurance segment Gross premiums written ($m) and cumulative RPI (%) for the years ended 2019 to 2023 Insurance segment 1,000.0 150% 900.0 145% • Strong growth in property insurance lines in positive 800.0 140% rating environment with mature book of business. 700.0 135% • Increased premiums in
Slide 20: Contacts
Contacts Investor Relations Media Jelena Bjelanovic Peter Krinks FTI Consulting Lancashire Holdings Limited Lancashire Holdings Limited 200 Aldersgate, 20 Fenchurch Street, 20 Fenchurch Street, Aldersgate Street, London, EC3M 3BY London, EC3M 3BY London, EC1A 4HD E Tom.Blackwell T +44 (0) 20 7264 40