Marine pricing at Lancashire in Q1 still weak compared with other sectors

Re/insurer Lancashire has reported relatively flat marine pricing for the first quarter of 2018.

Group GPW of $215.8m was up from $196.5m in Q1 2017. Net premiums written rose to $87.8m, from $76.3m. Net operating profit was $40.5m, up from $25.2m in the corresponding quarter last year.

Marine GPW was $14.9m for Q1 2018, down from $20.m in the same period last year. The decrease was mainly due to renewal timing on non-annual contracts written in the first quarter of 2017. Energy GPW rose to $30.4m, from $25.8m, although the first quarter is not a major renewal period for the energy book. The increase for the quarter in energy was largely due to exposure increases on prior underwriting year risk-attaching business in the energy construction class.

Group CEO Alex Maloney said that the group had seen an improved rating environment following the major catastrophe losses of 2017 “with rate increases across a high proportion of our product lines, so we are in a slightly more interesting trading environment than we have been for a number of years”. However, he said that, while this was “pleasing”, the demand supply dynamic “has not shifted sufficiently to bring about fundamental rate change across the board.”

In its “Renewal Price Index” for Lancashire (excluding Lloyd’s segment), Marine came in fifth out of six at 97%. Energy offshore (non-GoM) was third, at 103%, and Gulf of Mexico energy was second of six, at 110%. The overall average was 105% renewal rate.

In the Lancashire Lloyd’s segment, Marine was fourth of five at 101% renewal price. Energy was just ahead of it at 102%. The average was 106%.