Lancashire marine gross premiums rise 14.6% in H1

Insurer and reinsurer Lancashire Holdings has reported that Marine gross premiums written increased by 14.6% for the first six months of 2019 compared to the same period in 2018. It said that the increase in the marine segment was driven primarily by multi-year contracts renewing in the marine hull and marine P&I classes.

For Lancashire as a whole the combined ratio for H1 was 86.6%, up from 67.1% in the same period last year.

Numbers:

Gross premiums written 30 June 2019 30 June 2018 Change Change RPI
  $m $m $m % %
Property 164.3 144.1 20.2 14.0 107.0
Energy 60.1 67.8 (7.7) (11.4) 104.0
Marine 27.4 23.9 3.5 14.6 112.0
Aviation 12.2 8.8 3.4 38.6 100.0
Lloyd’s 165.6 147.9 17.7 12.0 107.0
Total 429.6 392.5 37.1 9.5 107.0
$m H1 2019 H1 2018
Net premiums written 222.6 234.0
Profit before tax 40.5 74.9
Profit after tax 39.1 75.8
Comprehensive income 68.7 64.4
Net operating profit 42.9 78.3
  H1 2019 H1 2018
Total investment return (including internal currency hedging) 3.2% 0.3%
Net loss ratio 34.5% 15.1%
Combined ratio 86.6% 67.1%
Accident year loss ratio 40.5% 38.7%

Group Chief Executive Officer Alex Maloney said that “I am pleased with our performance in the first half of 2019. I am also encouraged by the emerging evidence that the (re)insurance market is now experiencing the long anticipated improvements in discipline and pricing in many of the Group’s core business lines. We have seen good new business momentum in the first half of 2019, as we were able to benefit from our longstanding disciplined underwriting approach. In the face of a more cautious underwriting environment and evidence of market retrenchment in the specialty lines in which we write, we were able to take advantage of improving terms and demand. While the market overall was characterised by a number of attritional losses in the first half of 2019 and substantial loss creep on prior year events, it is worth noting that our ultimate net loss estimates for the 2018 and 2017 catastrophe events have remained largely stable, allowing us to deliver a solid combined ratio of 86.6% for the half year”.

Maloney felt that, looking ahead, “the recent evidence of better market discipline and pricing will take time to feed through to our bottom line”.