Bermuda-based Lancashire Insurance Holdings grew premiums across its reinsurance segment by 8.1% year-on-year to $1.2 billion in the 2025 financial year, with each pillar contributing to growth, as Group profit after tax decreased by 9% to $293.4 million amid higher costs from weather and large loss events.
Across the business, gross premiums written (GPW) increased 5.1% year-on-year to $2.3 billion, with the aforementioned growth in reinsurance premiums supported by a slight increase in insurance premiums to $1.07 billion in 2025, compared with $1.05 billion in 2024.
In the reinsurance segment, Lancashire notes that as the rating environment softened marginally, the reinsurance RPI (renewal price index) was 97% in 2025 compared to 101% in 2024, while the insurance RPI was 95%, down from 101% in 2024, resulting in an overall RPI for the Group of 96% for 2025, compared with 101% in 2024.
Commenting on the reinsurance segment, the firm said: “In the context of rating adequacy remaining very healthy, we took the opportunity to grow and build out our relationships and franchise value with core clients.”
“In the insurance segment, market conditions softened slightly for the first year since 2017, however, given seven years of rate increases, the majority of product lines remain very well priced with embedded underwriting margin,” added Lancashire.
Group-wide, insurance revenue increased to $1.9 billion in 2025 from $1.8 billion in 2024, while gross premiums earned as a percentage of gross premiums written was 97.5% for 2025 compared to 95.1% for 2024, which Lancashire attributes to premium earnings from prior underwriting years where the business saw substantial growth.
The insurance service result improved to $381 million in 2025 from $380 million in 2024, with a $292 million contribution from the reinsurance segment and an $89 million contribution from the insurance segment.
Across 2025, Lancashire experienced net losses, undiscounted and excluding reinstatement premiums, from catastrophe, weather and large loss events of $277 million, up from $215.2 million in 2024. Of the 2025 total, catastrophe and weather losses were $184.7 million, driven by a net loss impact of $163.4 million from the California wildfires. Lancashire also experienced net losses from large risk events of $92.3 million in 2025.
Additionally, favourable prior accident year loss development for the undiscounted net movement in loss reserves was $122.8 million during 2025, reveals the firm, which is an increase on the prior year’s $93.3 million.
“This was primarily due to general IBNR, catastrophe and large loss reserve releases on the 2024 and 2023 accident years and a further strengthening in reserves of $32.9 million relating to direct and indirect losses from the Ukraine conflict,” says Lancashire.
The Group net insurance ratio increased to 73.5% in 2025 compared with 71.3% in 2024, with a lower reinsurance net ratio of 60.5% more than offset by a rise in the insurance segment ratio to 87.3%.
The discounted combined ratio increased to 83.7% in 2025 from 80% in 2024, and the undiscounted combined was 93.1% in 2025, up on the prior year’s 89.1%.
Allocation of reinsurance premiums decreased by $16 million during 2025 compared to 2024, and as a percentage of insurance revenue for the Group was 22.8%, down on 24.9% in 2024, “reflecting more efficient reinsurance purchasing as the Group seeks to achieve efficiencies and to benefit from its increasingly diversified underwriting portfolio.”
The Group net investment return rose to $218 million in 2025 with a total investment return of 7%, compared with $162 million and 5%, respectively, in 2024.
Alex Maloney, Group Chief Executive Officer, commented: “The excellent results we are reporting today are the outcome of another successful 12 months for Lancashire, with strong underwriting profit supported by healthy investment returns.
“Our results for 2025, a year that marked 20 years since Lancashire was founded, demonstrate the strategic progress we have made in refocusing the business to become more diversified across product lines and geographies. We have increased our resilience and significantly reduced volatility in our earnings. This has enabled the Group to deliver an excellent outcome for shareholders and positions the business to capture future market opportunities.”
“Lancashire is a very different business now compared to just a few years ago. That is evidenced by today’s results, as well as the confidence we have as a management team to continue to deliver sustainable returns over the coming years. It is important to emphasise the quality of people we have been able to retain and attract, which has underpinned this performance and continues to be a genuine competitive differentiator for our business.
“At Lancashire, we have always believed in the market cycle and that successfully managing its varying phases is the key to long-term and sustainable value creation. Looking ahead, while we expect 2026 to be more competitive, we are still in a healthy place when it comes to rate adequacy. We continue to take advantage of underwriting opportunities, with our usual focus on disciplined underwriting and actively managing capital and risk exposures.
“We have also invested in the business, including the development of Lancashire US, and through our buy-out of underwriting capacity for Syndicate 2010. This acquisition means we now provide all of the capacity for both our syndicates, offering us additional optionality within our Lloyd’s platform. Our confidence is supported by our strong capital position and the recent upgrade of our long-term issuer credit and financial strength ratings, from A- to A by S&P Global Ratings is validation of the improved financial resilience of the business.
“During 2025, we continued to grow in line with the underwriting opportunity with gross premiums written increasing $109.7 million to $2,259.3 million, producing an insurance service result (underwriting profit) of $381.1 million. Insurance revenue also increased by 5.4% to $1,860.4 million and, for 2025, the undiscounted combined ratio was 93.1%, or 83.7% on a discounted basis.
“Even in a year which began with the devastating California wildfires, the largest ever wildfire loss for the industry, our profit after tax of $293.4 million further illustrates the success of our approach.
“Our strong underwriting results were supported by the performance of our investment portfolio, which has grown in line with the expansion of the wider business. In 2025, the portfolio returned 7.0%, or $218.0 million, making a valuable contribution to our overall profitability and we anticipate a continued stream of investment income in the coming years.
“The Group’s robust capital position and excellent operating performance meant we were both able to invest in the business and return capital to our shareholders, and, during 2025, we paid aggregate special and ordinary dividends of $1.225 per share or $296.5 million. I am pleased to say that we have also declared a special dividend of $0.50 per share for the full-year 2025, in addition to a final ordinary dividend. Since inception Lancashire has returned more than $3.7 billion to shareholders, including over 100% of our profits over the past two years, while still investing in and growing the business. This is fully aligned to our long-term capital management philosophy, and we will seek to continue to return excess capital to shareholders, while still maintaining our underwriting momentum.
“Of course, we would not be able to report these excellent results today without the hard work and commitment of our staff. I want to thank them all for their support and enthusiasm and for playing their role in retaining our unique and positive culture, which is highly valued. During 2025, we carried out an engagement survey for all employees, which had an excellent response rate with 85% of people saying they feel proud to work at Lancashire. Our Bermuda business was also named a top three employer on the island during the year.
“Our strong culture also feeds into our efforts to have a positive wider social impact, through financial donations and the skills of our people, and to help those less fortunate. I am pleased to say that since its inception in 2007, the Lancashire Foundation has now donated more than $24.8 million to charitable organisations, including $0.8 million in 2025.
“Lancashire is a distinctive and high-value business, and we will continue to leverage the strong franchise we have built over the past 20 years. I am confident that through our diverse underwriting platforms and products, our focus on the efficient and disciplined use of capital, and our talented teams, who thrive in a performance-driven culture, we can look forward to many more successful years ahead.”
