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 $198.8 million for the six months ending in June 30, from $155.7 million in the same period of 2025. Profit after tax was $141.7 million, up from $109.2 million a year earlier. Diluted earnings per share were $0.56, compared with $0.44 in the first half of 2025.
Net losses from catastrophe, weather, and large loss events totalled $60.1 million in the first half of 2026. That compares with $211.2 million in the same period last year, when the California wildfires accounted for the majority of the losses.
Gross premiums written were $1.315 billion, down from $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 $930 million, against $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 $749.2 million, down from $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 $565.8 million, up from $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.
Favorable prior accident year development of $21.8 million was recorded, down from $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 $51.3 million, down from $108.2 million a year earlier. The full-period return of 1.2% included a negative mark-to-market impact of $29.6 million, driven by higher government bond yields over the period.
The annualized 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 $5.92 at 30 June 2026, compared with $6.08 a year earlier. Total capital available to Lancashire was approximately $2 billion, split between $1.5 billion in shareholders' equity and $500 million in long-term debt.
