Earnings Report: Lancashire Group

Selected earnings highlights from, Lancashire Group, which include both its insurance and reinsurance operations, for the first quarter of 2012 are as follows:
1 2012 Q1 2011
Gross premiums written ———— $234.0 mn $171.9 mn
Net premiums written ————— $132.1 mn $137.7 mn
Net operating profit —————– $42.9 mn $6.9 mn
Net realized/unrealized capital gains – $21.6 mn $11.7 mn
Net investment income ———— $8.7 mn $10.87 mn

Q1 combined ratio – 74.0 percent (97.4 percent in Q1 2011)

Group CEO Richard Brindle commented: “”Lancashire has achieved another solid performance during the first quarter and has once again increased book value per share, including dividends. We have now produced a compound annual return of 19.4 percent over six years of trading in markets that have experienced very volatile losses in both risk and catastrophe lines.

“As anticipated, the new year renewal season produced attractive opportunities in our property retrocession and catastrophe reinsurance lines. The Accordion facility was well utilised during the January renewals and I am also pleased to report a successful Japanese and Asian reinsurance renewal season at 1 April 2012, where we saw attractive opportunities supporting established and well-respected insurers within the region. Pricing in energy underwriting lines has also strengthened during the quarter.

“Despite the firming of premium rates in certain key classes, we have yet to witness a wide-scale hardening of rates across all classes. While the Costa Concordia loss affected our combined ratio, as it has many others in the industry, it has been frustrating to see industry-wide pricing in marine lines failing to show the improvements that might have been expected following such a loss.

“We continue to explore ways of achieving maximum capital efficiency for our shareholders and ensuring that we remain equipped to take advantage of underwriting opportunities as they arise. In that regard I would like to thank our shareholders for their support at the annual general meeting held on 3 May 2012, and in particular the approval of authority for Lancashire to issue up to 10 percent of issued share capital on a non pre-emptive basis. As a company that tries to plan for every eventuality we are delighted that our shareholders have again given us the authority to issue shares quickly in the event that the market offers additional opportunities.”

The complete report and information on accessing the earnings conference call may be obtained on the company’s website

Source: Lancashire Group