The third quarter of 2018 proved to be something of a mixed bag for Lancashire Holdings.
The insurance group saw its GWP fall in the three months ending September 30 to £115.2 million – a drop from the same period last year, which stood at £143 million. Net written premiums also fell, down from £106.1 million to £86.3 million.
Yet despite those falls it certainly wasn’t all bad news – because the firm’s losses were dramatically cut year-on-year. In 2017 it was hit with a loss of £139 million over the period. By comparison this time around, its losses were reduced to just £24.6 million.
So, what has been the difference maker?
“The third quarter of 2018 was at least as active as 2017 in terms of the number of events to impact the industry. The magnitude of insured loss, however, has been much smaller,” explained Alex Maloney, group CEO. “We have, nonetheless, produced a small loss for the quarter as a result of these events.
“While it’s always disappointing to lose money in any quarter, we remain in positive territory for the year to date. The loss events during the quarter are a well understood part of our business model; we are prepared for such events and they lie within our risk expectations.”
Maloney expressed his confidence in where the business is heading, particularly as others withdraw from what are seen as non-profitable lines of business.
“We are well positioned to build out our offering by attracting high-calibre underwriters to our team where we see opportunities,” he said. “We have also recently seen Lloyd’s take a tougher stance on the need for market underwriting discipline and for a return to pricing levels which are fundamentally profitable. The group’s philosophy has, for many years, stressed the central importance of disciplined underwriting and we have a record of tailoring our income levels and our exposures accordingly and therefore welcome these actions.
“I believe we will have a growth opportunity in 2019 in our specialty lines. The risk exposures in our property catastrophe lines are likely to remain at similar levels as for 2018, although we remain open to opportunities in these classes too.”
