LANCASHIRE HOLDINGS LIMITED
DIVERSIFIED PORTFOLIO AND DISCIPLINED UNDERWRITING
DELIVER STRONG RETURNS IN H1 2026
29 July 2026
Hamilton, Bermuda
Lancashire Holdings Limited ("Lancashire" or "the Group") today announces its
results for the six months ended 30 June 2026.
· Stable top line and strong combined ratio, in line with our
expectations
· Diversified underwriting portfolio and efficient use of reinsurance
· Disciplined approach and focused investment aligned to market
opportunities
· Continued excellent capital strength; interim dividend of 7.5 cents
per common share
· On track to deliver high-teens RoE for full year 2026
[]
For the six months ended 30 June 2026 30 June 2025
$m $m
Highlights
Gross premiums written 1,315.0 1,356.2
Insurance revenue 930.0 930.1
Insurance service result 198.8 155.7
Net investment return 51.3 108.2
Profit after tax 141.7 109.2
Financial ratios
Net insurance ratio 71.5 % 78.6 %
Combined ratio (discounted) 80.7 % 87.4 %
Combined ratio 90.8 % 97.8 %
(undiscounted)
Total investment return 1.2 % 3.7 %
Per share data
Diluted book value per share $5.92 $6.08
Change in diluted book value 9.7 % 7.6 %
per share ("RoE")
Dividends per common share $0.65 $0.40
paid in the financial
year[1]
Diluted earnings per share $0.56 $0.44
1. Includes special dividend of 50 cents per share paid in April 2026 in respect
of the year ended 31 December 2025.
Alex Maloney, Group Chief Executive Officer, commented
"The first half of 2026 demonstrated the strength of Lancashire's strategy in
action. Our diversified portfolio, disciplined underwriting and strong capital
position have produced an excellent return for shareholders while we continue to
invest for future growth.
For the first six months of the year, the Group delivered a healthy profit of
$141.7 million, resulting in an annualised RoE of 19.6%, reflecting the quality
of our underwriting portfolio and strong capital base. These results further
demonstrate our ability to generate attractive returns through different stages
of the market cycle.
In line with our expectations of a broadly stable top line, gross premiums
written were $1,315.0 million and insurance revenue was $930.0 million. The
Group RPI for the first six months of the year was 92%, which is reflective of
some softening - but not soft - market conditions and, importantly, rating
adequacy remains across most lines of business.
Although the loss environment during the first half was less active than 2025,
it was by no means benign. Against this backdrop, Lancashire delivered another
strong result. Our exposure to losses arising from events in the Middle East
remains manageable and we have established reserves for expected claims to date,
which are not material to the Group. We have also increased our reserve for the
MV Dali Baltimore Bridge loss to our full policy limits, thereby capping any
further downside from this event.
Our investment portfolio also performed well notwithstanding the mark-to-market
impact of higher government bond yields over the period. The portfolio remains
high quality and short duration, consistent with our approach to risk management
and capital preservation.
We have also continued to invest in talent and products to enhance our
underwriting capabilities and support long-term value creation.
In June, we announced the expansion of Lancashire Insurance US's product
portfolio to include financial lines, inland marine, and environmental liability
classes. We have also added some new niche underwriting lines to our London
portfolio and will continue to pursue opportunities aligned with market
conditions.
Our ability to attract high-calibre talent across the business remains a clear
competitive advantage and is supported by the strong and positive culture that
we have built across the Lancashire Group.
Looking ahead, we remain on track to deliver our guidance given at the start of
the year of a high-teens RoE for 2026 and we are well positioned to manage the
next phase of the cycle, in which we expect rates will continue to reflect the
excess capacity in the industry. In this context, we will draw on our
considerable experience and expertise to remain disciplined, and we have the
agility to deploy capital where we see the best returns. Lancashire's strong
capital base, robust reserves, and more efficient use of reinsurance provide
important levers to underpin performance and to manage the business through the
cycle.
As we enter the second half of the year, I would like to thank colleagues across
the Lancashire Group for their continued hard work and commitment. With a
diversified business, clear strategy, talented teams, and strong culture, we are
well positioned to sustain our momentum and generate attractive returns for our
shareholders."
Underwriting results
For the six 30 June 30 June
months ended 2026 2025
Reinsurance Insurance Total Reinsurance Insurance Total
$m $m $m $m $m $m
Gross 749.2 565.8 1,315.0 815.6 540.6 1,356.2
premiums
written
RPI 91% 93% 92% 97% 96% 96%
Insurance 437.0 493.0 930.0 450.6 479.5 930.1
revenue
Insurance 125.5 73.3 198.8 80.4 75.3 155.7
service
result
Net 62.5% 79.8% 71.5% 78.3% 78.9% 78.6%
insurance
ratio
Gross premiums written
On an underlying basis, which excludes the significant impact of reinstatement
premiums in the prior period, gross premiums written in the first six months of
2026 decreased by 1% year-on-year to $1,315.0 million.
In the reinsurance segment, we saw lower level of inwards reinstatement premiums
and executed a planned reduction in inwards property retrocession business,
which was partially offset by growth in energy, marine and aviation treaty
lines. In the insurance segment growth was broad based across the energy, marine
and casualty lines of business. The Group acquired 100% of the underwriting
capacity of Syndicate 2010 for the 2026 and subsequent underwriting years,
increasing the overall consolidated Group share of gross premiums written. This
has helped to offset the softening market conditions. The overall RPI for the
Group for the period was 92%.
Insurance revenue
Insurance revenue was flat for the first six months of 2026 compared with the
same period in 2025. Gross premiums earned, the key driver of insurance revenue,
as a percentage of gross premiums written was 83.0% for 2026 compared with 81.9%
for 2025. The increased percentage reflects premium earnings from prior
underwriting years where the business saw substantial growth.
Allocation of reinsurance premiums
Allocation of reinsurance premiums increased by $28.2 million, or 14%, during
the first six months of 2026 compared with the same period in 2025. The
allocation of reinsurance premiums as a percentage of insurance revenue for the
Group was 24.9%, compared with 21.9% in the prior year period. In 2026, the
Group purchased more proportional outwards reinsurance protection than in the
first half of 2025 with much of this shift covering the property reinsurance and
insurance lines of business.
Net loss environment
During the first six months of 2026, the Group experienced net losses
(undiscounted, excluding reinstatement premiums) from catastrophe, weather and
large loss events totalling $60.1 million. None of the catastrophe or large risk
event losses was individually material for the Group. This is a significant
reduction compared with the prior year period (2025: $211.2 million) in which
the California wildfires represented the majority of the net losses.
Favourable prior accident year loss development for the undiscounted net
movement in loss reserves was $21.8 million during the first six months of 2026.
This is significantly lower than the $109.1 million released in the same period
in 2025, where we recognised releases across a number of prior year catastrophe
events. For 2026, favourable development was seen primarily on the 2023 and 2025
accident years, partially offset by adverse development on the 2024 accident
year following an increase in our reserves on the MV Dali Baltimore Bridge loss
to our full policy limits, thereby capping any further downside from this
event.
The Group remains conservatively reserved with a net discounted risk adjustment
of $286.7 million and an 85% confidence level. Our consistently prudent approach
to reserving is demonstrated by positive prior year reserve development in every
financial year since the Group's inception.
Net discounting benefit
The table below shows the total net impact of discounting in respect of both
insurance contracts issued, and reinsurance contracts held, by financial
statement line item.
30 June 30 June
2026 2025
For the six Insurance Reinsurance Total Insurance Reinsurance Total
months ended
contracts contracts $m contracts contracts $m
issued held issued held
$m $m $m $m
Initial 83.5 (13.1) 70.4 102.0 (26.3) 75.7
discount
included
in insurance
service
result
Unwind of (51.3) 11.6 (39.7) (50.3) 11.5 (38.8)
discount
Impact of 19.5 (3.8) 15.7 (22.7) 4.8 (17.9)
change in
assumptions
Finance (31.8) 7.8 (24.0) (73.0) 16.3 (56.7)
(expense)
income
Total net 51.7 (5.3) 46.4 29.0 (10.0) 19.0
discounting
income
(expense)
The total impact of discounting for the first six months of 2026 was a net
benefit of $46.4 million, compared with a net benefit of $19.0 million for the
same period in 2025, primarily due to higher market rates across all our major
currencies in the period. The unwind of discount continues to increase following
growth in the discount provision over recent years in what has been a relatively
high discount rate environment.
Investments
For the six months ended 30 June 2026 30 June 2025
$m $m
Total net investment return 51.3 108.2
Total investment return, including net investment income and net realised and
unrealised gains and losses, was $51.3 million for the first six months of 2026
compared with $108.2 million for the same period in 2025. Net investment income,
excluding realised and unrealised gains and losses, of $78.3 million was at a
similar level to the prior year period (2025: $81.3 million).
The total investment return of 1.2% (1.4% excluding foreign exchange gains and
losses) included a negative unrealised mark-to-market impact of $29.6 million
(2025: $31.0 million unrealised gain). This was driven by higher Treasury rates
in the period, due to the impact of geopolitical risks, higher energy prices,
and increased market volatility, partially offset by a modest tightening in
credit spreads. The private investment funds contributed positive returns during
the period.
The managed portfolio was invested as follows:
As at 30 June 2026 31 December 2025
$m $m
Fixed maturity securities 2,758.4 2,810.2
Managed cash and cash equivalents 213.7 161.2
Private investment funds 308.7 291.2
Hedge funds 7.1 8.8
Other investments 0.4 (0.3)
Total 3,288.3 3,271.1
Key investment portfolio statistics for our fixed maturity securities and
managed cash and cash equivalents were:
As at 30 June 2026 31 December 2025
Duration 2.1 years 2.1 years
Credit quality AA- A+
Book yield 4.6% 4.6%
Market yield 4.7% 4.4%
Other income
Other income of $15.2 million (2025: $3.7 million) mainly comprised consortium
fees and profit commissions where we have expanded our use of consortia to
generate fee income, particularly in the aviation and construction classes.
Operating expenses
For the six months ended 30 June 2026 30 June 2025
$m $m
Operating expenses - fixed 111.0 103.5
Operating expenses - variable 19.0 19.9
Total operating expenses 130.0 123.4
Directly attributable expenses (65.6) (59.2)
allocated to insurance service
expenses
Other operating expenses 64.4 64.2
The Group continues to invest in profitable growth opportunities in its
established markets, including the US. Consequently, total operating expenses
increased by 5% year-on-year, reflecting an increase in headcount and the impact
of acquiring 100% of Syndicate 2010's underwriting capacity.
In the first six months of 2026, $65.6 million of operating expenses were
directly attributable to the fulfillment of insurance contracts issued, and have
therefore been re-allocated to insurance service expenses and form part of the
insurance service result. This compares with $59.2 million for the same period
in 2025, and is reflective of the increase within the Group's operating expense
base.
Capital
As at 30 June 2026, total capital available to Lancashire was approximately $2.0
billion, comprising shareholders' equity of $1.5 billion and $0.5 billion of
long-term debt. Tangible capital was approximately $1.7 billion. Leverage was
23.1% on total capital and 26.6% on tangible capital. Total capital and total
tangible capital as at 31 December 2025 were $2.0 billion and $1.7 billion,
respectively.
Dividends
On 28 July 2026, Lancashire's Board of Directors declared an interim dividend of
$0.075 (approximately £0.06) per common share, which will result in an aggregate
payment of approximately $18.0 million. The dividend will be paid in pounds
sterling on 4 September 2026 (the "Dividend Payment Date") to shareholders of
record on 7 August 2026 (the "Record Date") using the £ / $ spot market exchange
rate at 12 noon London time on the Record Date.
Financial information
The Unaudited Condensed Interim Financial Statements for the six months ended 30
June 2026 are published on Lancashire's website at
www.lancashiregroup.com (https://www.lancashiregroup.com/en/index.html).
Analyst and investor earnings conference call
There will be an analyst and investor conference call on the results at 1pm UK
time / 9am Bermuda time / 8am EST on Wednesday 29 July 2026. The conference call
will be hosted by Lancashire management.
Participant registration and access information:
Audio conference call access:
https://emportal.ink/4vIOYl1
Please register at this link to obtain your personal audio conference pin and
call details.
Webcast access:
https://onlinexperiences.com/Launch/QReg/ShowUUID=87F4C625-CD4D-463A-9556
-40A532642469
Please use this link to register and access the call via webcast.
A webcast replay facility will be available for 12 months and accessible at:
https://www.lancashiregroup.com/en/investors/results-reports-and
-presentations.html
For further information, please contact:
Lancashire
Holdings
Limited
Christopher chris.head@lancashiregroup.com (chris.head%40lancashiregroup.com)
Head
Paul Measday paul.measday@lancashiregroup.com
FTI
Consulting
Edward Berry Edward.Berry@FTIConsulting.com
Tom Blackwell Tom.Blackwell@FTIConsulting.com
About Lancashire
Lancashire, through its operating subsidiaries, is a provider of global
specialty insurance and reinsurance products. The Group companies carry the
following ratings:
Financial Financial Long Term Issuer
Strength Strength Rating2
Rating1 Outlook1
A.M. Best A (Excellent) Stable bbb+
S&P Global Ratings A Stable BBB+
Moody's A3 Stable Baa2
1. Financial Strength Rating and Financial Strength Outlook apply to Lancashire
Insurance Company Limited and Lancashire Insurance Company (UK) Limited.
2. Long Term Issuer Rating applies to Lancashire Holdings Limited.
Lancashire Syndicates Limited benefits from Lloyd's ratings: A.M. Best: A+
(Excellent); S&P Global Ratings: AA- (Very Strong); and Fitch: AA- (Very
Strong).
Lancashire's common shares trade in the equity shares (commercial companies)
category of the Main Market of the London Stock Exchange under the ticker symbol
LRE. Lancashire has its head office and registered office at Power House, 7 Par
-la-Ville Road, Hamilton HM 11, Bermuda.
The Bermuda Monetary Authority is the Group Supervisor of the Lancashire Group.
For more information, please visit Lancashire's website at
www.lancashiregroup.com.
This release contains inside information for the purposes of Article 7 of the
Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by
virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in
accordance with the Company's obligations under Article 17 of MAR. Upon the
publication of this release via the Regulatory Information Service, this inside
information will be considered to be in the public domain. The information was
submitted for publication, through the agency of the contact persons set out
above, at 07:00 UK time on 29 July 2026.
Alternative Performance Measures (APMs)
As is common practice within the insurance industry, the Group also utilises
certain non-GAAP measures to evaluate, monitor and manage the business and to
aid users' understanding of the Group. Management believes that APMs are
important for understanding the Group's overall results of operations, and may
be helpful to investors and other interested parties who may benefit from having
a consistent basis for comparison with other companies within the industry.
However, these measures may not be comparable to similarly labelled measures
used by companies inside or outside the insurance industry. In addition, the
information contained herein should not be viewed as superior to, or a
substitute for, the measures determined in accordance with the accounting
principles used by the Group for its unaudited condensed interim consolidated
financial statements or in accordance with GAAP.
In compliance with the Guidelines on APMs of the European Securities and Markets
Authority and as suggested by the Financial Reporting Council, as applied by the
Financial Conduct Authority, information on APMs which the Group use is
described below. This information is not subject to the external auditor's
independent review report.
All amounts, excluding share data, ratios, percentages, or where otherwise
stated, are in millions of US dollars.
Net insurance ratio:
Ratio, in per cent, of net insurance expenses to net insurance revenue. Net
insurance expenses represent the insurance service expenses less amounts
recoverable from reinsurers. Net insurance revenue represents insurance revenue
less allocation of reinsurance premium.
For the six months ended 30 June 2026 2025
Insurance service expenses 593.9 792.1
Amounts recoverable from reinsurers (94.5) (221.3)
Net insurance expenses 499.4 570.8
Insurance revenue 930.0 930.1
Allocation of reinsurance premium (231.8) (203.6)
Net insurance revenue 698.2 726.5
Net insurance ratio 71.5% 78.6%
Operating expense ratio:
Ratio, in per cent, of other operating expenses, excluding equity-based
compensation expense, to net insurance revenue.
For the six months ended 30 June 2026 2025
Other operating expenses 64.4 64.2
Net insurance revenue 698.2 726.5
Operating expense ratio 9.2% 8.8%
Combined ratio (discounted):
Ratio, in per cent, of the sum of net insurance expenses plus other operating
expenses to net insurance revenue.
For the six months ended 30 June 2026 2025
Net insurance ratio 71.5% 78.6%
Operating expense ratio 9.2% 8.8%
Combined ratio (discounted) 80.7% 87.4%
Combined ratio (undiscounted) (KPI):
Ratio, in per cent, of the sum of net insurance expenses plus other operating
expenses to net insurance revenue. This ratio excludes the impact of the
discounting recognised within net insurance expenses.
For the six months ended 30 June 2026 2025
Combined ratio (discounted) 80.7% 87.4%
Discount included in net insurance expenses 70.4 75.7
Net insurance revenue 698.2 726.5
Discounting impact on combined ratio 10.1% 10.4%
Combined ratio (undiscounted) 90.8% 97.8%
Diluted book value per share ('DBVS') attributable to the Group:
Calculated based on the value of the total shareholders' equity attributable to
the Group, divided by the sum of all shares and dilutive restricted stock units
(as calculated under the treasury stock method), assuming all are exercised.
As at 30 June 2026 31 December 2025
Shareholders' equity attributable to the Group 1,490.0 1,509.3
Common voting shares outstanding* 243,222,429 242,559,721
Shares relating to dilutive restricted stock 8,533,468 8,555,268
Fully converted book value denominator 251,755,897 251,114,989
Diluted book value per share $5.92 $6.01
*Common voting shares outstanding comprise issued share capital less amounts
held in trust.
Change in DBVS (KPI):
The internal rate of return of the change in DBVS in the period plus accrued
dividends. Sometimes referred to as RoE.
As at 30 June 2026 31 December 2025
Opening DBVS $6.01 $6.03
Q1 dividend per share $0.50 $0.25
Q2 dividend per share $0.15 $0.15
Q3 dividend per share - $0.075
Q4 dividend per share - $0.75
Closing DBVS $5.92 $6.01
Change in DBVS 9.7% 20.9%
Total investment return (KPI):
Total investment return in percentage terms is calculated by dividing the total
net investment return, excluding interest income on non-managed cash and cash
equivalents, by the investment portfolio net asset value, including managed cash
and cash equivalents, on a daily basis. These daily returns are then
geometrically linked to provide a total return for the period, which includes
the net impact of foreign exchange. The total investment return can be
approximated by dividing the total net investment return, excluding interest on
non-managed cash and cash equivalents, and including net foreign exchange gains
and losses related to investments and managed cash and cash equivalents, by the
average portfolio net asset value, including managed cash and cash equivalents.
For the six months ended 30 June 2026 2025
Net investment return 51.3 108.2
Less interest income on non-managed cash and (5.8) (7.6)
cash equivalents
Net foreign exchange (losses)/gains related to (4.9) 15.7
investments and managed cash and cash
equivalents
Net investment return adjusted for interest and 40.6 116.3
foreign exchange
Average invested assets including managed cash 3,279.7 3,211.4
and cash equivalents*
Approximate total investment return 1.2% 3.6%
Reported total investment return 1.2% 3.7%
*Calculated as the average between the opening and closing investments and
managed cash and cash equivalents.
Total shareholder return (KPI):
Determined using the simple method of calculating the increase/(decrease) in the
Group's share price, adjusted for dividends (included at the ex-dividend date)
as recalculated below. This measurement basis will generally approximate the
increase/(decrease) in share price in the period measured on a total return
basis, which assumes the reinvestment of dividends.
As at 30 June 2026 31 December 2025
Opening share price $8.62 $8.25
Q1 dividend per share $0.50 $0.25
Q2 dividend per share $0.15 $0.15
Q2 closing share price $8.55 -
Q3 dividend per share - $0.075
Q4 dividend per share - $0.75
Q4 closing share price - $8.62
Total shareholder return 6.7% 19.4%
Gross premiums written:
The Group adopted IFRS 17 on 1 January 2023. Under IFRS 4, the previous
insurance accounting standard, the Group reported gross premiums written on the
consolidated statement of comprehensive income as amounts payable by the
insured, excluding any taxes or duties levied on the premium, including
brokerage and commission deducted by intermediaries and any inwards
reinstatement premiums. The Group continues to report gross premiums written as
a growth metric and non-GAAP APM.
The table below reconciles gross premiums written on an IFRS 4 basis to
insurance revenue on an IFRS 17 basis.
For the six months ended 30 June 2026 2025
Gross premiums written 1,315.0 1,356.2
Change in unearned premiums (223.5) (246.0)
Gross premiums earned 1,091.5 1,110.2
Adjust for reinstatement premiums (15.4) (41.2)
Less commission and non-distinct investment components (146.1) (138.9)
Total insurance revenue 930.0 930.1
Gross premiums written under management (KPI):
The gross premiums written under management equals the total of the Group's
consolidated gross premiums written, plus the external names portion of the
gross premiums written in Syndicate 2010.
For the six months ended 30 June 2026 2025
Gross premiums written by the Group 1,315.0 1,356.2
LSL Syndicate 2010 - external Names portion 3.4 53.5
of gross premiums written (unconsolidated)
Total gross premiums written under 1,318.4 1,409.7
management
NOTE REGARDING RPI METHODOLOGY
THE RENEWAL PRICE INDEX ("RPI") IS AN INTERNAL METHODOLOGY THAT MANAGEMENT USES
TO TRACK TRENDS IN PREMIUM RATES OF A PORTFOLIO OF INSURANCE AND REINSURANCE
CONTRACTS. THE RPI WRITTEN IN THE RESPECTIVE SEGMENTS IS CALCULATED ON A PER
CONTRACT BASIS AND REFLECTS MANAGEMENT'S ASSESSMENT OF RELATIVE CHANGES IN
PRICE, TERMS, CONDITIONS AND LIMITS AND IS WEIGHTED BY PREMIUM VOLUME. THE RPI
DOES NOT INCLUDE NEW BUSINESS, TO OFFER A CONSISTENT BASIS FOR ANALYSIS. THE
CALCULATION INVOLVES A DEGREE OF JUDGEMENT IN RELATION TO COMPARABILITY OF
CONTRACTS AND THE ASSESSMENT NOTED ABOVE. TO ENHANCE THE RPI METHODOLOGY,
MANAGEMENT MAY REVISE THE METHODOLOGY AND ASSUMPTIONS UNDERLYING THE RPI, SO THE
TRENDS IN PREMIUM RATES REFLECTED IN THE RPI MAY NOT BE COMPARABLE OVER TIME.
CONSIDERATION IS ONLY GIVEN TO RENEWALS OF A COMPARABLE NATURE SO IT DOES NOT
REFLECT EVERY CONTRACT IN THE PORTFOLIO OF CONTRACTS. THE FUTURE PROFITABILITY
OF THE PORTFOLIO OF CONTRACTS WITHIN THE RPI IS DEPENDENT UPON MANY FACTORS
BESIDES THE TRENDS IN PREMIUM RATES.
NOTE REGARDING FORWARD-LOOKING STATEMENTS
CERTAIN STATEMENTS AND INDICATIVE PROJECTIONS (WHICH MAY INCLUDE MODELLED LOSS
SCENARIOS) MADE IN THIS RELEASE OR OTHERWISE THAT ARE NOT BASED ON CURRENT OR
HISTORICAL FACTS ARE FORWARD-LOOKING IN NATURE INCLUDING, WITHOUT LIMITATION,
STATEMENTS CONTAINING THE WORDS "BELIEVES", "AIMS", "ANTICIPATES", "PLANS",
"PROJECTS", "FORECASTS", "GUIDANCE", "INTENDS", "EXPECTS", "ESTIMATES",
"PREDICTS", "MAY", "CAN", "LIKELY", "WILL", "SEEKS", "SHOULD", OR, IN EACH CASE,
THEIR NEGATIVE OR COMPARABLE TERMINOLOGY. SUCH FORWARD-LOOKING STATEMENTS
INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER IMPORTANT FACTORS THAT
COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE GROUP TO BE
MATERIALLY DIFFERENT FROM FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED
OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. FOR A DESCRIPTION OF SOME OF
THESE FACTORS, SEE THE GROUP'S ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31
DECEMBER 2025 AND THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2026. IN ADDITION TO THOSE FACTORS
CONTAINED IN THE GROUP'S 2025 ANNUAL REPORT AND ACCOUNTS AND THE UNAUDITED
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30
JUNE 2026, ANY FORWARD-LOOKING STATEMENTS CONTAINED IN THIS RELEASE MAY BE
AFFECTED BY: A CONTINUATION OR ESCALATION OF GLOBAL OR REGIONAL TRADE DISRUPTION
ARISING FROM THE CONFLICT IN THE MIDDLE EAST AND THE CONSEQUENT ECONOMIC
UNCERTAINTY WHICH MAY AFFECT (RE)INSURANCE DEMAND OR THE PERFORMANCE OF OUR
INVESTMENT PORTFOLIO. ALL FORWARD-LOOKING STATEMENTS IN THIS RELEASE OR
OTHERWISE SPEAK ONLY AS AT THE DATE OF PUBLICATION. LANCASHIRE EXPRESSLY
DISCLAIMS ANY OBLIGATION OR UNDERTAKING (SAVE AS REQUIRED TO COMPLY WITH ANY
LEGAL OR REGULATORY OBLIGATIONS INCLUDING THE RULES OF THE LONDON STOCK
EXCHANGE) TO DISSEMINATE ANY UPDATES OR REVISIONS TO ANY FORWARD-LOOKING
STATEMENT TO REFLECT ANY CHANGES IN THE GROUP'S EXPECTATIONS OR CIRCUMSTANCES ON
WHICH ANY SUCH STATEMENT IS BASED. ALL SUBSEQUENT WRITTEN AND ORAL FORWARD
-LOOKING STATEMENTS ATTRIBUTABLE TO THE GROUP OR INDIVIDUALS ACTING ON BEHALF OF
THE GROUP ARE EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THIS NOTE. PROSPECTIVE
INVESTORS SHOULD SPECIFICALLY CONSIDER THE FACTORS IDENTIFIED IN THIS RELEASE
AND THE REPORT AND ACCOUNTS NOTED ABOVE WHICH COULD CAUSE ACTUAL RESULTS TO
DIFFER BEFORE MAKING AN INVESTMENT DECISION.
Consolidated statement of comprehensive income
For the six months ended 30 June 2026 2025
$m $m
Insurance revenue 930.0 930.1
Insurance service expenses (593.9) (792.1)
Insurance service result before reinsurance contracts held 336.1 138.0
Allocation of reinsurance premium (231.8) (203.6)
Amounts recoverable from reinsurers 94.5 221.3
Net (expense) income from reinsurance contracts held (137.3) 17.7
Insurance service result 198.8 155.7
Net investment return 51.3 108.2
Finance expense from insurance contracts issued (31.8) (73.0)
Finance income from reinsurance contracts held 7.8 16.3
Net insurance and investment result 226.1 207.2
Share of profit of associate 0.3 1.8
Other income 15.2 3.7
Net foreign exchange gains (losses) 4.1 (1.4)
Other operating expenses (64.4) (64.2)
Equity based compensation (12.7) (11.4)
Financing costs (17.6) (17.1)
Profit before tax 151.0 118.6
Tax charge (9.3) (9.4)
Profit after tax 141.7 109.2
Earnings per share
Basic $0.58 $0.45
Diluted $0.56 $0.44
Consolidated statement of financial position
As at 30 June 2026 31 December 2025
$m $m
Assets
Cash and cash equivalents 610.1 561.4
Accrued interest receivable 24.8 24.6
Investments 3,074.6 3,109.9
Reinsurance contract assets 661.4 717.8
Other receivables 47.9 101.2
Corporation tax receivable 0.3 0.4
Deferred tax asset 1.2 -
Investment in associate 4.1 4.8
Right-of-use assets 21.6 22.7
Property, plant and equipment 8.5 8.2
Intangible assets 251.6 253.0
Total assets 4,706.1 4,804.0
Liabilities
Insurance contract liabilities 2,631.7 2,712.1
Other payables 87.4 89.8
Corporation tax payable 7.2 -
Deferred tax liability 13.1 15.6
Lease liabilities 29.0 29.7
Long-term debt 447.7 447.5
Total liabilities 3,216.1 3,294.7
Shareholders' equity
Share capital 122.0 122.0
Own shares (5.6) (8.7)
Other reserves 1,242.6 1,249.6
Retained earnings 131.0 146.4
Total shareholders' equity 1,490.0 1,509.3
Total liabilities and shareholders' equity 4,706.1 4,804.0
Consolidated statement of cash flows
For the six months ended 30 June 2026 2025
$m $m
Cash flows from operating
activities
Profit before tax 151.0 118.6
Adjustments for:
Tax paid (5.7) (2.1)
Depreciation 4.1 3.3
Amortisation of intangible 1.4 1.5
assets
Interest expense on long-term 12.9 12.9
debt
Interest expense on lease 0.9 0.6
liabilities
Interest income (70.8) (71.7)
Dividend income (7.5) (9.9)
Net realised (gains) losses on (5.8) 1.3
investments
Net unrealised losses (gains) on 29.6 (31.0)
investments
Equity based compensation 12.7 11.4
Foreign exchange (gains) losses (3.2) 2.1
Share of profit of associate (0.3) (1.8)
Changes in operational assets
and liabilities
Insurance and reinsurance (20.8) 55.8
contracts
Other assets and liabilities (18.4) (35.1)
Net cash flows from operating 80.1 55.9
activities
Cash flows from investing
activities
Interest income received 70.6 69.5
Dividend income received 7.5 9.9
Purchase of property, plant and (2.0) (0.6)
equipment
Internally generated intangible - (1.2)
asset
Investment in associate 0.9 2.9
Purchase of investments (697.5) (780.9)
Proceeds on sale of investments 780.5 707.5
Net cash flows from investing 160.0 7.1
activities
Cash flows used in financing
activities
Interest paid (12.9) (12.9)
Lease liabilities paid (3.3) (3.2)
Dividends paid (157.1) (96.5)
Shares purchased by the trust (9.9) -
Distributions by trust (6.7) (3.8)
Net cash flows used in financing (189.9) (116.4)
activities
Net increase (decrease) in cash 50.2 (53.4)
and cash equivalents
Cash and cash equivalents at 561.4 684.3
beginning of period
Effect of exchange rate (2.6) 16.6
fluctuations on cash and cash
equivalents
Effect of other items on cash 1.1 5.7
and cash equivalents1
Cash and cash equivalents at end 610.1 653.2
of period
1. Other items includes the effect of prior underwriting years of account
losses and loss adjustment expenses, and reinsurance recoveries, being reinsured
to close into the oldest open underwriting year of account, to the extent where
the Group's syndicate participation has changed between those years of account.
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