Lancashire Holdings Limited (LRE) Q2 2025 Earnings Call

Investor webinar replay

Replay transcript excerpt

Welcome to the Lancashire Q2 2025 earnings conference call. The speakers today will be Alex Maloney, Natalie Kershaw, and Matthew Narbon. I'll now turn the call over to Alex. Please go ahead. Good afternoon, everyone. Thank you for joining our call today. You will notice in the operator's introduction that Matt is presenting the underwriting portion of our call today. This is because Paul is on sabbatical, which is one of the benefits of working in Lancashire. After 10 years of being with us, you can take a well-deserved short break, which is what Paul is doing. So today, I will give some highlights on the progress the business has made so far this year. Matt, our Deputy Chief Underwriting Officer, who some of you know, will then focus on the underwriting trends. Natalie will cover the financials, and then we then go to Q&A. I want to start by saying that the first half of 2025 was very much the demonstration of our strategy in action. Even with the sizeable industry loss of California wildfires in Q1, we end the first half with an annualised ROE of about 15%. In fact, Q2 was our most profitable second quarter ever in our history. You can see that the work we have been doing since 2018 to make the group more resilient to cat losses has worked. This strong result allows us to, at this stage, upgrade our ROE expectations to high teens for the 2025 year. As a reminder, this assumes the same level of catastrophe and large losses as the second half of 2024 when we had hurricanes Milton and Helene. The insurance market conditions remain favourable and most lines fundamentally are well priced. As we have talked about before, after many years of rate increases, we are now seeing a more competitive market. This isn't in the form of new capital entering the market, rather it's...