A sharp fall in catastrophe and large loss activity drove Lancashire Holdings Limited's combined ratio (undiscounted) to 90.8% in the first half of 2026, a seven percentage point improvement from 97.8% a year earlier.
The insurance service result rose to US$198.8 million for the six months ending in June 30, from US$155.7 million in the same period of 2025. Profit after tax was US$141.7 million, up from US$109.2 million a year earlier. Diluted earnings per share were US$0.56, compared with US$0.44 in the first half of 2025.
Net losses from catastrophe, weather, and large loss events totalled US$60.1 million in the first half of 2026. That compares with US$211.2 million in the same period last year, when the California wildfires accounted for the majority of the losses.
Gross premiums written were US$1.315 billion, down from US$1.356 billion a year earlier. On an underlying basis, which strips out the impact of elevated reinstatement premiums in the prior period, gross premiums written decreased by 1% year-on-year. Insurance revenue was broadly flat at US$930 million, against US$930.1 million in the first half of 2025.
Lancashire's renewal price index (RPI) for the period was 92%, against 96% a year earlier. Chief executive Alex Maloney said the figure was "reflective of some softening - but not soft - market conditions" and noted that rating adequacy remained across most lines of business.
The H1 reading continues a slide from the 93% recorded in the first quarter. WTW's latest specialty market survey found that 75% of material insurance classes showed rate decreases at the January 2026 renewals.
The net insurance ratio improved to 71.5% from 78.6% in the prior-year period. The discounted combined ratio was 80.7%, compared with 87.4% a year earlier.
In the reinsurance segment, gross premiums written were US$749.2 million, down from US$815.6 million. The decrease reflected lower inwards reinstatement premiums and a planned reduction in property retrocession.
Growth in energy, marine, and aviation treaty lines partially offset the decline. The segment's net insurance ratio was 62.5%, against 78.3% a year earlier, a material improvement driven by the lighter catastrophe environment.
The insurance segment recorded gross premiums written of US$565.8 million, up from US$540.6 million, with growth across energy, marine and casualty lines. Lancashire acquired 100% of the underwriting capacity of Syndicate 2010 for the 2026 underwriting year, which helped offset softening market conditions. The segment's net insurance ratio was 79.8%, compared with 78.9% in the first half of 2025.
Favourable prior accident year development of US$21.8 million was recorded, down from US$109.1 million in the same period of 2025. Development was primarily on the 2023 and 2025 accident years. The 2024 accident year saw adverse movement after Lancashire increased reserves on the MV Dali Baltimore Bridge loss to full policy limits.
Total net investment return was US$51.3 million, down from US$108.2 million a year earlier. The full-period return of 1.2% included a negative mark-to-market impact of US$29.6 million, driven by higher government bond yields over the period.
The annualised return on equity was 19.6% for the half year. Maloney said the group remains on track to deliver its full-year guidance of a high-teens RoE for 2026. The board declared an interim dividend of $0.075 per common share.
The diluted book value per share was US$5.92 at 30 June 2026, compared with US$6.08 a year earlier. Total capital available to Lancashire was approximately US$2 billion, split between US$1.5 billion in shareholders' equity and US$500 million in long-term debt.
