Lancashire Holdings Limited has announced its strongest ever first quarter premiums for 2021 as gross premiums written (GPW) increased by 46.1% year-on-year to $354.8 million, with a renewal price index of 112%.
The growth in premiums written was largely a result of growth in the property and casualty (P&C) reinsurance segment as the company deployed further capital into the hardening market.
Year-on-year, the P&C Re segment increased its GPW by 97.2% to $223 million in Q1 2021, compared with $113.1 million for the same period a year earlier.
“The increase in this segment was primarily driven by new business as well as rate increases, particularly within the property reinsurance and property retrocession classes,” says Lancashire.
During the opening quarter of the year, Lancashire also commenced underwriting casualty reinsurance and added new underwriting teams in both the specialty reinsurance and accident and health classes. Lancashire notes that these new teams have contributed to the new business growth in the period.
GPW in the P&C insurance segment declined by 0.3% to $39.2 million in Q1 2021, compared with $39.3 million in the prior year quarter.
In Energy, Lancashire has reported GPW growth of 27% to $45.2 million for Q1 2021, against $35.6 million for Q1 2020.
“Rate and exposure increases in the energy liabilities and power and utility classes were particularly strong and contributed to the growth in gross premium written,” says Lancashire.
Marine and Aviation classes saw the steepest year-on-year declines in GPW, falling by 12.8% to $21.8 million and 14.1% to $25.6 million, respectively.
Lancashire has also reported on the claims environment for the first quarter of 2021. In relation to winter storm Uri in the U.S., Lancashire has recorded Q1 net losses, including the impact of reinsurance and inwards and outwards reinstatement premiums, in the range of $35 million to $45 million.
Additionally, the company has revealed that its total ultimate loss estimates, net of reinsurance and inwards and outwards reinstatement premiums, for COVID-19-related losses is unchanged.
During the first quarter, the re/insurer’s performance also benefited from favourable prior year development of $4.7 million, compared to adverse development of $17 million for Q1 2020.
Alex Maloney, Group Chief Executive Officer (CEO), commented: “I am very pleased to report that the Lancashire Group has grown its Q1 gross premium written significantly by 46.1% to $354.8 million (in Q1 2021) from $242.8 million (in Q1 2020). This increase in our top line premium income represents our strongest ever first quarter premium and has been supported by the equity capital which we raised in June 2020. Our growth was driven by the improved market conditions.
“We have increased revenue across many of our core lines as well as achieving faster than expected momentum in some of our newer business lines.
“Absent the estimated impact of Winter Storm Uri, our underlying financial performance was strong. We look forward to the exciting opportunities that are expected to develop throughout the year as we are able to more flexibly combine the benefits of remote interaction with a return to the office environment. This will provide the opportunity for greater engagement amongst ourselves, our clients and our broader stakeholders. Furthermore, our strong balance sheet, boosted by our recent debt raise, stands us in good stead to fund the opportunities we see ahead.”