Lancashire Holdings Ltd., a specialty insurer based in Bermuda and listed on the London Stock Exchange, is projecting a mid-teens return on equity for 2025. This forecast follows a solid 2024, marked by significant profits and growth, despite absorbing substantial losses from catastrophic events, including the Baltimore bridge collapse.
Lancashire announced an after-tax profit of $321.3 million for the year ending December 31, 2024. This performance was driven by robust underwriting and a 5% investment return. Gross premiums written increased by 11.3%, exceeding $2.1 billion, while insurance revenue rose by 16.1%, reaching nearly $1.8 billion. The company’s insurance service result was $379.9 million, with a discounted combined ratio of 80.0% and an undiscounted combined ratio of 89.1%.
Financial growth stemmed from new business, particularly within the United States and Australian property markets. Investment income also contributed significantly, increasing by 33.5% to $144.8 million. However, the company faced $214.1 million in net losses from catastrophic and large-risk events. These included hurricanes Milton, Helene, and Debby, storm Boris, and hailstorms in Calgary.
Lancashire Holdings reported a strong 2024 financial performance, yet is impacted by catastrophes such as the Baltimore Bridge disaster.
A notable challenge for Lancashire was the MV Dali collision in March 2024, which led to the collapse of the Francis Scott Key Bridge. This event emerged as one of the most significant loss events for the company, underscoring broader concerns about rising claims severity across the insurance industry. Early estimates also suggest that the January 2025 California wildfires could impact results by $145 million to $165 million.
Despite these challenges, Lancashire returned $354.2 million to shareholders in 2024. The board declared a total year-end dividend of $0.40 per share, consisting of a final ordinary dividend of $0.15 and a special dividend of $0.25. “Importantly, we remain extremely well capitalized to fund future growth opportunities,” said Alex Maloney, group chief executive officer.
Lancashire Holdings Limited, founded in 2005 by Richard Brindle, specializes in property, casualty, energy, and marine coverage. The company was established to provide bespoke insurance solutions in high-risk sectors. From its inception, Lancashire has positioned itself as a specialty (re)insurer, focusing on high-margin, low-frequency risks. The firm operates through various platforms, including Lancashire Insurance Company Limited in Bermuda and Lancashire Insurance Company in the United Kingdom.
As Lancashire approaches its 20th anniversary in 2025, it remains focused on maintaining its specialty underwriting expertise and capital discipline. Considering the increasing climate-related risks and evolving regulatory challenges, Lancashire is expected to continue adapting its strategy. Their core focus is on high-margin, specialty insurance solutions.
