Bermuda-based insurer and reinsurer, Lancashire Insurance Holdings, is “very pleased” with the outcome of its inwards and outwards reinsurance renewals at January 1, 2026, as the firm took advantage of the opportunity to tailor better structured products to help manage its earnings volatility in this phase of the cycle, said Paul Gregory, Chief Underwriting Officer (CUO).
Gregory, alongside Lancashire’s Chief Executive Officer (CEO), Alex Maloney, recently commented on the carrier’s experience at the 1.1 2026 reinsurance renewal season, during a call with analysts following the release of a robust set of results for the 2025 financial year.
“Looking at the market backdrop more broadly, we have always believed the market is cyclical, and whilst we have seen a more competitive market, the portfolio we secured at the 1st of January renewals is still one of the best we have ever had, in terms of rate adequacy,” said Maloney in his opening remarks.
He went on to highlight that the Group RPI, which ended 2025 at 96%, remains above pre-2023 levels, adding that “this is reflective of a market where, after a few profitable years, the supply of capital has increased as existing players deploy more retained earnings.”
“Demand, meanwhile, has not kept pace with the increased supply of capital. But I do want to emphasise that margins remain favourable, particularly at the net level, taking into account reinsurance costs. This gives us confidence when looking at our profitability for 2026 and beyond,” he continued.
CUO Gregory, in his opening remarks, delved deeper into the company’s experience at 1.1 2026, and also underlined the strong outcome of its own reinsurance purchases for the year ahead.
“To summarise the recent 1.1 renewal season, we’re very pleased with our performance, where we managed the more competitive environment well and secured an outcome in line with our expectations. This sets us up very well to execute on our plans for the remainder of the year.
“As always, we appreciated the ongoing support we received from our clients and brokers, and look forward to building on these valued relationships,” said Gregory.
Lancashire is also a buyer of reinsurance, and the firm is also “very pleased” with the outcome of its outwards reinsurance renewals at 1.1 2026.
Gregory explained: “As we’ve said, the one benefit of the softening market is the products we buy to protect our earnings and balance sheet are also more efficient. We can manage our reinsurance spend, which helps mitigate some of the margin pressure on the inwards book.
“As importantly, we have better tailored the structure of our reinsurance to box in our exposures, which better manages our earnings volatility. As an example, the aggregate catastrophe products that we described last year renewed at 1.1 with a lower attachment point and more limit. This provides more certainty of underwriting result in an active catastrophe loss year.”
In 2025, Lancashire decided to use some its headroom to buy-out the remaining names on Syndicate 2010, and while this increased share means the firm has assumed more cat risk, Gregory highlighted the continued retraction of the inwards retro portfolio, driven by market conditions, as well as the benefit of a more efficient reinsurance programme.
During the Q&A, Gregory was questioned on the cost of reinsurance for 2026, and whether the firm is buying more or looking to reduce any of the risk limits further.
“We would expect our RI spend in dollar terms to be broadly stable compared to 2025. So, you’re right, we’re definitely seeing the benefit of a softening reinsurance market, and that comes through in less premium spend. And as I mentioned in my script, there was also the opportunity to tailor better structured reinsurance products to help manage our earnings volatility. So, we’ve taken some of that saving and used it there to construct a more all-encompassing reinsurance protection for the business, to help us maintain sustainable earnings cycle. So, very simply, very similar spend year-on-year,” he said.
