Lancashire Holdings Ltd., the Bermuda-based specialty insurer with a listing on the London Stock Exchange, is projecting a mid-teens return on equity for 2025, according to recent reports. This forecast comes after a successful 2024, where the company demonstrated strong financial performance despite absorbing substantial losses from various catastrophic events.
Lancashire’s after-tax profit for the year ending December 31, 2024, reached $321.3 million, driven by robust underwriting performance and a 5% investment return. Gross premiums written increased by 11.3%, exceeding $2.1 billion, and insurance revenue grew by 16.1%, reaching nearly $1.8 billion. These figures highlight the company’s continued expansion and market presence.
A significant factor influencing Lancashire’s 2024 results was its involvement in the Baltimore bridge collapse. The MV Dali collision in March 2024, which caused the Francis Scott Key Bridge to collapse, became one of the most significant loss events for the company during the year. Lancashire reported an insurance service result of $379.9 million, with a discounted combined ratio of 80.0% and an undiscounted combined ratio of 89.1%.
The company’s underwriting operations continued to grow, with reinsurance premiums climbing 13.5% and insurance premiums rising 9.1%. This growth was fueled by new business, particularly in the United States and Australian property markets. Investment income also contributed positively to Lancashire’s financial standing, increasing by 33.5% to $144.8 million. Despite these gains, Lancashire absorbed $214.1 million in net losses from several catastrophic and large-risk events, including hurricanes and hailstorms. Adding to the financial burden, the Baltimore bridge disaster represented the largest single large-risk event for which the company was liable. The incident reinforces broader concerns within the insurance industry regarding the rising severity of claims.
In 2024, Lancashire returned $354.2 million to shareholders through dividends. The board declared a total year-end dividend of $0.40 per share, which included 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,” stated Alex Maloney, group chief executive officer.
Looking ahead to 2025, the company expects to generate a mid-teens return on equity, assuming loss activity remains in line with 2024 levels. However, early estimates suggest that the January 2025 California wildfires could impact results by $145 million to $165 million. Lancashire Holdings Limited specializes in property, casualty, energy, and marine coverage. The company was founded in Bermuda in 2005 by Richard Brindle and has since established a strong reputation for providing specialized insurance and reinsurance solutions, particularly in high-risk sectors. The focus has been on underwriting discipline and capital efficiency.
