Lancashire Holdings Limited - Lancashire Holdings Limited's Full-Year 2025 Results
PROFIT AFTER TAX OF
Highlights:
•
Gross premiums written increased 5.1% year-on-year to
•
Insurance service result of
•
Profit after tax of
• Total investment return of 7.0%, including unrealised gains and losses.
•
Total dividends with respect to 2025 of
For the year ended 31 December 2025 31 December 2024
$m $m
Highlights
Gross premiums written1 2,259.3 2,149.6
Insurance revenue 1,860.4 1,765.1
Insurance service result 381.1 379.9
Net investment return 218.0 162.2
Profit after tax 293.4 321.3
Financial ratios
Net insurance ratio1 73.5 % 71.3 %
Combined ratio (discounted)1 83.7 % 80.0 %
Combined ratio (undiscounted)1 93.1 % 89.1 %
Total investment return1 7.0 % 5.0 %
Per Share data
Diluted book value per share1 $6.01 $6.03
Change in diluted book value per share 20.9 % 23.4 %
("ROE")1
Dividends per common share paid in the $1.225 $1.475
financial year2
Diluted earnings per share $1.17 $1.30
1. Please refer to the end of this release for details of how these Alternative Performance Measures (APMs) are calculated.
2. Includes special dividend of
“The excellent results we are reporting today are the outcome of another successful 12 months for Lancashire, with strong underwriting profit supported by healthy investment returns.
Our results for 2025, a year that marked 20 years since Lancashire was founded, demonstrate the strategic progress we have made in refocusing the business to become more diversified across product lines and geographies. We have increased our resilience and significantly reduced volatility in our earnings. This has enabled the Group to deliver an excellent outcome for shareholders and positions the business to capture future market opportunities.
Lancashire is a very different business now compared to just a few years ago. That is evidenced by today's results, as well as the confidence we have as a management team to continue to deliver sustainable returns over the coming years. It is important to emphasise the quality of people we have been able to retain and attract, which has underpinned this performance and continues to be a genuine competitive differentiator for our business.
At Lancashire, we have always believed in the market cycle and that successfully managing its varying phases is the key to long-term and sustainable value creation. Looking ahead, while we expect 2026 to be more competitive, we are still in a healthy place when it comes to rate adequacy. We continue to take advantage of underwriting opportunities, with our usual focus on disciplined underwriting and actively managing capital and risk exposures.
We have also invested in the business, including the development of Lancashire US, and through our buy-out of underwriting capacity for Syndicate 2010. This acquisition means we now provide all of the capacity for both our syndicates, offering us additional optionality within our Lloyd’s platform. Our confidence is supported by our strong capital position and the recent upgrade of our long-term issuer credit and financial strength ratings, from A- to A by S&P Global Ratings is validation of the improved financial resilience of the business.
During 2025, we continued to grow in line with the underwriting opportunity with gross premiums written increasing
Even in a year which began with the devastating
Our strong underwriting results were supported by the performance of our investment portfolio, which has grown in line with the expansion of the wider business. In 2025, the portfolio returned 7.0%, or
The Group’s robust capital position and excellent operating performance meant we were both able to invest in the business and return capital to our shareholders, and, during 2025, we paid aggregate special and ordinary dividends of
Of course, we would not be able to report these excellent results today without the hard work and commitment of our staff. I want to thank them all for their support and enthusiasm and for playing their role in retaining our unique and positive culture, which is highly valued. During 2025, we carried out an engagement survey for all employees, which had an excellent response rate with 85% of people saying they feel proud to work at Lancashire. Our
Our strong culture also feeds into our efforts to have a positive wider social impact, through financial donations and the skills of our people, and to help those less fortunate. I am pleased to say that since its inception in 2007, the
Lancashire is a distinctive and high-value business, and we will continue to leverage the strong franchise we have built over the past 20 years. I am confident that through our diverse underwriting platforms and products, our focus on the efficient and disciplined use of capital, and our talented teams, who thrive in a performance-driven culture, we can look forward to many more successful years ahead.”
Underwriting results
For the year ended 31 December 2025 31 December 2024
Reinsurance Insurance Total Reinsurance Insurance Total
$m $m $m $m $m $m
Gross premiums 1,187.2 1,072.1 2,259.3 1,097.8 1,051.8 2,149.6
written
RPI 97% 95% 96% 101% 101% 101%
Insurance revenue 904.4 956.0 1,860.4 855.1 910.0 1,765.1
Insurance service 292.4 88.7 381.1 264.1 115.8 379.9
result
Net insurance ratio 60.5% 87.3% 73.5% 61.6% 81.9% 71.3%
Gross premiums written
Gross premiums written increased by
In the reinsurance segment, the rating environment softened marginally with a reinsurance segment RPI of 97%. In the context of rating adequacy remaining very healthy, we took the opportunity to grow and build out our relationships and franchise value with core clients. Premiums across the reinsurance segment grew 8.1% year-on-year, with each pillar contributing to growth.
In the insurance segment, market conditions softened slightly for the first year since 2017, however, given seven years of rate increases, the majority of product lines remain very well priced with embedded underwriting margin. Given favourable rate adequacy we continued to selectively grow our footprint and increased premiums year-on-year. The insurance segment RPI was 95% and we have increased our premiums by 1.9% year-on-year. The overall RPI for the Group was 96%.
Insurance revenue
Insurance revenue increased by
Allocation of reinsurance premiums
Allocation of reinsurance premiums decreased by
Net loss environment
During 2025, the Group experienced net losses (undiscounted, excluding reinstatement premiums) from catastrophe, weather and large loss events totalling
In comparison, during 2024, the Group experienced net losses (undiscounted, excluding reinstatement premiums) from catastrophe, weather and large loss events totalling
Favourable prior accident year loss development for the undiscounted net movement in loss reserves was
In comparison, the favourable prior accident year undiscounted net movement in loss reserves during 2024 was
This continues our track record of favourable reserve releases and the Group remains conservatively reserved at an 85% confidence interval.
Net discounting benefit
The table below shows the total net impact of discounting in respect of both insurance contracts issued, and reinsurance contracts held, by financial statement line item.
31 December 2025 31 December 2024
Insurance Reinsurance Insurance Reinsurance
contracts contracts Total contracts contracts Total
For the year ended
issued held $m issued held $m
$m $m $m $m
Initial discount
included in insurance 169.3 (33.9) 135.4 144.4 (24.1) 120.3
service result
Unwind of discount (101.1) 23.6 (77.5) (95.5) 26.9 (68.6)
Impact of change in (32.5) 7.1 (25.4) 17.6 (2.9) 14.7
assumptions
Finance (expense) (133.6) 30.7 (102.9) (77.9) 24.0 (53.9)
income
Total net discounting 35.7 (3.2) 32.5 66.5 (0.1) 66.4
income (expense)
The total impact of discounting for 2025 was a net benefit of
The discount rates for US dollar and pounds sterling have decreased in 2025. This has driven an adverse impact from the change in discount rate assumptions. The unwind of discount has increased and reflects the growth in the discount provision over recent years in what has been a relatively high discount rate environment.
In 2024, the discount rates increased across all major currencies creating a positive impact from the change in discount rate assumptions and a higher overall net benefit from discounting.
Investments
31 December 2025
31 December 2024
For the year ended
$m $m
Total net investment return 218.0 162.2
Total investment return, including net investment income, net realised gains and losses and net change in unrealised gains and losses, was
The investment portfolio generated a total investment return of 7.0% during 2025. The returns were driven by investment income, benefiting from higher yields combined with rising prices due to falling
For 2024, the investment portfolio generated a positive return of 5.0%. The returns were driven primarily from investment income given the higher yields throughout most of the year. In addition to positive returns from the fixed income portfolio, the risk assets, notably the bank loans and the private credit funds, contributed positively to the overall investment return.
The managed portfolio was invested as follows:
31 December 2025 31 December 2024
As at
$m $m
Fixed maturity securities 2,810.2 2,603.8
Managed cash and cash equivalents 161.2 294.4
Private investment funds 291.2 253.1
Hedge funds 8.8 7.9
Other investments (0.3) 0.1
Total 3,271.1 3,159.3
Key investment portfolio statistics for our fixed maturity securities and managed cash and cash equivalents were:
As at 31 December 2025 31 December 2024 Duration 2.1 years 2.0 years Credit quality A+ AA- Book yield 4.6% 4.7% Market yield 4.4% 5.0%
Other operating expenses
31 December 2025 31 December 2024
For the year ended
$m $m
Operating expenses - fixed 217.8 184.8
Operating expenses - variable 47.7 36.4
Total operating expenses 265.5 221.2
Directly attributable expenses allocated to (119.3) (105.3)
insurance service expenses
Other operating expenses 146.2 115.9
The most significant driver of the increase in operating expenses for 2025, compared to 2024, was an increase in fixed and variable employment expenses. Our increased headcount, and the underlying growth in the underwriting portfolio, drove increases in IT, operational processing and office costs, as expected. In 2025, operating expenses also included some one-off project-related consultancy fees and an impairment charge recognised on internally generated intangible assets.
In 2025,
Capital
As at
Dividends
On
Lancashire's Board of Directors has declared a special dividend of
Financial information
The Audited Consolidated Financial Statements for the year ended
The 2025 Annual Report and Accounts will be available on Lancashire's website from
Analyst and investor earnings conference call
There will be an analyst and investor conference call on the results at
Participant registration and access information:
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For further information, please contact:
Lancashire Holdings Limited
Christopher Head
chris.head@lancashiregroup.com
Jelena Bjelanovic
jelena.bjelanovic@lancashiregroup.com
FTI Consulting
Edward Berry
Edward.Berry@FTIConsulting.com
Tom Blackwell
Tom.Blackwell@FTIConsulting.com
About Lancashire
Lancashire, through its operating subsidiaries, is a provider of global specialty in surance and reinsurance products. The Group companies carry the following ratings:
Financial Financial
Long Term Issuer
Strength Strength
Rating2
Rating1 Outlook1
A.M. Best A (Excellent) Stable bbb+
S&P Global Ratings A Stable BBB+
Moody’s A3 Stable Baa2
1. Financial Strength Rating and Financial Strength Outlook apply to
2. Long Term Issuer Rating applies to
Lancashire’s common shares trade in the equity shares (commercial companies) category of the Main Market of the
The
For more information, please visit Lancashire’s website at www.lancashiregroup.com .
This release contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of
Alternative Performance Measures (APMs)
As is common practice within the insurance industry, the Group also utilises certain non-GAAP measures to evaluate, monitor and manage the business and to aid users’ understanding of the Group. Management believes that APMs are important for understanding the Group’s overall results of operations, and may be helpful to investors and other interested parties who may benefit from having a consistent basis for comparison with other companies within the industry. However, these measures may not be comparable to similarly labelled measures used by companies inside or outside the insurance industry. In addition, the information contained herein should not be viewed as superior to, or a substitute for, the measures determined in accordance with the accounting principles used by the Group for its consolidated financial statements or in accordance with GAAP.
In compliance with the Guidelines on APMs of the
All amounts, excluding share data, ratios, percentages, or where otherwise stated, are in millions of US dollars.
Net insurance ratio:
Ratio, in per cent, of net insurance expenses to net insurance revenue. Net insurance expenses represent the insurance service expenses less amounts recoverable from reinsurers. Net insurance revenue represents insurance revenue less allocation of reinsurance premium.
For the year ended 31 December 2025 2024 Insurance service expenses 1,451.2 1,186.1 Amounts recoverable from reinsurers (395.4) (240.3) Net insurance expenses 1,055.8 945.8 Insurance revenue 1,860.4 1,765.1 Allocation of reinsurance premium (423.5) (439.4) Net insurance revenue 1,436.9 1,325.7 Net insurance ratio 73.5% 71.3%
Operating expense ratio:
Ratio, in per cent, of other operating expenses, excluding equity-based compensation expense, to net insurance revenue.
For the year ended 31 December 2025 2024 Other operating expenses 146.2 115.9 Net insurance revenue 1,436.9 1,325.7 Operating expense ratio 10.2% 8.7%
Combined ratio (discounted):
Ratio, in per cent, of the sum of net insurance expenses plus other operating expenses to net insurance revenue.
For the year ended31 December 2025 2024 Net insurance ratio 73.5% 71.3% Operating expense ratio 10.2% 8.7% Combined ratio (discounted) 83.7% 80.0%
Combined ratio (undiscounted) (KPI):
Ratio, in per cent, of the sum of net insurance expenses plus other operating expenses to net insurance revenue. This ratio excludes the impact of the discounting recognised within net insurance expenses.
For the year ended 31 December 2025 2024 Combined ratio (discounted) 83.7 % 80.0 % Discount included in net insurance expenses 135.4 120.3 Net insurance revenue 1,436.9 1,325.7 Discounting impact on combined ratio 9.4 % 9.1 % Combined ratio (undiscounted) 93.1 % 89.1 %
Diluted book value per share ('DBVS') attributable to the Group:
Calculated based on the value of the total shareholders’ equity attributable to the Group, divided by the sum of all shares and dilutive restricted stock units (as calculated under the treasury stock method), assuming all are exercised.
As at 31 December 2025 2024 Shareholders’ equity attributable to the Group 1,509.3 1,493.3 Common voting shares outstanding* 242,559,721 240,584,795 Shares relating to dilutive restricted stock 8,555,268 6,877,762 Fully converted book value denominator 251,114,989 247,462,557 Diluted book value per share$6.01 $6.03
*Common voting shares outstanding comprise issued share capital less amounts held in trust.
Change in DBVS (KPI):
The internal rate of return of the change in DBVS in the period plus accrued dividends. Sometimes referred to as RoE.
As at 31 December 2025 2024 Opening DBVS$6.03 $6.17 Q1 dividend per share$0.25 $0.50 Q2 dividend per share$0.15 $0.15 Q3 dividend per share$0.075 $0.075 Q4 dividend per share$0.75 $0.75 Closing DBVS$6.01 $6.03 Change in DBVS 20.9% 23.4%
Total investment return (KPI):
Total investment return in percentage terms is calculated by dividing the total net investment return, excluding interest income on non-managed cash and cash equivalents, by the investment portfolio net asset value, including managed cash and cash equivalents, on a daily basis. These daily returns are then geometrically linked to provide a total return for the period, which includes the net impact of foreign exchange. The total investment return can be approximated by dividing the total net investment return, excluding interest on non-managed cash and cash equivalents, and including net foreign exchange gains and losses related to investments and managed cash and cash equivalents, by the average portfolio net asset value, including managed cash and cash equivalents.
For the year ended 31 December 2025 2024 Net investment return 218.0 162.2 Less interest income on non-managed cash and cash equivalents (13.8) (13.6) Net foreign exchange gains / (losses) related to investments and 15.8 (6.0) managed cash and cash equivalents Net investment return adjusted for interest and foreign exchange 220.0 142.6 Average invested assets including managed cash and cash 3,215.2 2,939.3 equivalents* Approximate total investment return 6.8 % 4.9 % Reported total investment return 7.0 % 5.0 %
*Calculated as the average between the opening and closing investments and managed cash and cash equivalents.
Total shareholder return (KPI) :
Determined using the simple method of calculating the increase/(decrease) in the Group’s share price, adjusted for dividends (included at the ex-dividend date) as recalculated below. This measurement basis will generally approximate the increase/(decrease) in share price in the period measured on a total return basis, which assumes the reinvestment of dividends.
As at 31 December 2025 2024 Opening share price$8.25 $7.96 Q1 dividend per share$0.25 $0.50 Q2 dividend per share$0.75 $0.15 Q3 dividend per share$0.075 $0.075 Q4 dividend per share$0.75 $0.75 Q4 closing share price$8.62 $8.25 Total shareholder return 19.4% 22.1%
Gross premiums written:
The Group adopted IFRS 17 on
The table below reconciles gross premiums written on an IFRS 4 basis to insurance revenue on an IFRS 17 basis.
For the year ended 31 December 2025 2024 Gross premiums written 2,259.3 2,149.6 Change in unearned premiums (57.3) (105.9) Gross premiums earned 2,202.0 2,043.7 Adjust for reinstatement premiums (44.6) (5.3) Less commission and non-distinct investment components (297.0) (273.3) Total insurance revenue 1,860.4 1,765.1
Gross premiums written under management (KPI):
The gross premiums written under management equals the total of the Group’s consolidated gross premiums written, plus the external names portion of the gross premiums written in Syndicate 2010.
For the year ended 31 December 2025 2024 Gross premiums written by the Group 2,259.32,149.6 LSL Syndicate 2010 - external Names portion of gross premiums 81.0 120.5 written (unconsolidated) Total gross premiums written under management 2,340.3 2,270.1
NOTE REGARDING RPI METHODOLOGY
THE RENEWAL PRICE INDEX (“RPI”) IS AN INTERNAL METHODOLOGY THAT MANAGEMENT USES TO TRACK TRENDS IN PREMIUM RATES OF A PORTFOLIO OF INSURANCE AND REINSURANCE CONTRACTS. THE RPI WRITTEN IN THE RESPECTIVE SEGMENTS IS CALCULATED ON A PER CONTRACT BASIS AND REFLECTS MANAGEMENT’S ASSESSMENT OF RELATIVE CHANGES IN PRICE, TERMS, CONDITIONS AND LIMITS AND IS WEIGHTED BY PREMIUM VOLUME. THE RPI DOES NOT INCLUDE NEW BUSINESS, TO OFFER A CONSISTENT BASIS FOR ANALYSIS. THE CALCULATION INVOLVES A DEGREE OF JUDGEMENT IN RELATION TO COMPARABILITY OF CONTRACTS AND THE ASSESSMENT NOTED ABOVE. TO ENHANCE THE RPI METHODOLOGY, MANAGEMENT MAY REVISE THE METHODOLOGY AND ASSUMPTIONS UNDERLYING THE RPI, SO THE TRENDS IN PREMIUM RATES REFLECTED IN THE RPI MAY NOT BE COMPARABLE OVER TIME. CONSIDERATION IS ONLY GIVEN TO RENEWALS OF A COMPARABLE NATURE SO IT DOES NOT REFLECT EVERY CONTRACT IN THE PORTFOLIO OF CONTRACTS. THE FUTURE PROFITABILITY OF THE PORTFOLIO OF CONTRACTS WITHIN THE RPI IS DEPENDENT UPON MANY FACTORS BESIDES THE TRENDS IN PREMIUM RATES.
NOTE REGARDING FORWARD-LOOKING STATEMENTS
CERTAIN STATEMENTS AND INDICATIVE PROJECTIONS (WHICH MAY INCLUDE MODELLED LOSS SCENARIOS) MADE IN THIS RELEASE OR OTHERWISE THAT ARE NOT BASED ON CURRENT OR HISTORICAL FACTS ARE FORWARD-LOOKING IN NATURE INCLUDING, WITHOUT LIMITATION, STATEMENTS CONTAINING THE WORDS “BELIEVES”, “AIMS”, “ANTICIPATES”, “PLANS”, “PROJECTS”, “FORECASTS”, “GUIDANCE”, “POLICY”, “INTENDS”, “EXPECTS”, “ESTIMATES”, “PREDICTS”, “MAY”, “CAN”, “LIKELY”, “WILL”, “SEEKS”, “SHOULD”, OR, IN EACH CASE, THEIR NEGATIVE OR COMPARABLE TERMINOLOGY. SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND
Consolidated statement of comprehensive income
2025 2024
For the year ended 31 December
$m $m
Insurance revenue 1,860.4 1,765.1
Insurance service expenses (1,451.2) (1,186.1)
Insurance service result before reinsurance contracts held 409.2 579.0
Allocation of reinsurance premium (423.5) (439.4)
Amounts recoverable from reinsurers 395.4 240.3
Net expense from reinsurance contracts held (28.1) (199.1)
Insurance service result 381.1 379.9
Net investment return 218.0 162.2
Finance expense from insurance contracts issued (133.6) (77.9)
Finance income from reinsurance contracts held 30.7 24.0
Net insurance and investment result 496.2 488.2
Share of profit of associate 3.2 8.6
Other income 7.3 10.4
Net foreign exchange gains (losses) 1.7 (2.6)
Other operating expenses (146.2) (115.9)
Equity based compensation (23.5) (19.0)
Financing costs (33.8) (33.0)
Profit before tax 304.9 336.7
Tax charge (11.5) (15.4)
Profit after tax 293.4 321.3
Earnings per share
Basic $1.21 $1.34
Diluted $1.17 $1.30
Consolidated statement of financial position
2025 2024
As at 31 December
$m $m
Assets
Cash and cash equivalents 561.4 684.3
Accrued interest receivable 24.6 22.0
Investments 3,109.9 2,864.9
Reinsurance contract assets 717.8 557.2
Other receivables 101.2 20.5
Corporation tax receivable 0.4 —
Investment in associate 4.8 9.1
Right-of-use assets 22.7 16.2
Property, plant and equipment 8.2 8.7
Intangible assets 253.0 197.0
Total assets 4,804.0 4,379.9
Liabilities
Insurance contract liabilities 2,712.1 2,300.4
Other payables 89.8 91.9
Corporation tax payable — 2.7
Deferred tax liability 15.6 22.3
Lease liabilities 29.7 22.3
Long-term debt 447.5 447.0
Total liabilities 3,294.7 2,886.6
Shareholders' equity
Share capital 122.0 122.0
Own shares (8.7) (20.5)
Other reserves 1,249.6 1,242.3
Retained earnings 146.4 149.5
Total shareholders’ equity 1,509.3 1,493.3
Total liabilities and shareholders’ equity 4,804.0 4,379.9
Consolidated statement of cash flows
2025 2024
For the year ended 31 December
$m $m
Cash flows from operating activities
Profit before tax 304.9 336.7
Adjustments for:
Tax paid (20.9) (7.7)
Depreciation 7.3 6.3
Amortisation on intangible assets 3.0 1.2
Impairment of internally generated intangible assets 10.3 —
Interest expense on long-term debt 25.8 25.8
Interest expense on lease liabilities 1.4 1.3
Interest income (145.4) (131.5)
Dividend income (18.5) (16.6)
Net unrealised gains on investments (58.2) (20.4)
Net realised gains on investments (1.3) (2.7)
Equity based compensation 23.5 19.0
Foreign exchange losses 4.4 1.2
Share of profit of associate (3.2) (8.6)
Changes in operational assets and liabilities
Insurance and reinsurance contracts 210.5 316.9
Other assets and liabilities (21.3) 52.9
Net cash flows from operating activities 322.3 573.8
Cash flows used in investing activities
Interest income received 142.9 126.2
Dividend income received 18.5 16.6
Purchase of property, plant and equipment (2.3) (1.5)
Purchase of syndicate participation rights (68.0) (11.2)
Internally generated intangible assets (1.3) (5.9)
Investment in associate 7.5 15.7
Advance to purchase private investment fund (70.0) —
Purchase of investments (1,586.2) (1,785.8)
Proceeds on sale of investments 1,425.3 1,394.0
Net cash flows used in investing activities (133.6) (251.9)
Cash flows used in financing activities
Interest paid (25.8) (25.8)
Lease liabilities paid (6.0) (4.0)
Dividends paid (296.5) (354.2)
Distributions by trust (5.1) (2.1)
Net cash flows used in financing activities (333.4) (386.1)
Net decrease in cash and cash equivalents (144.7) (64.2)
Cash and cash equivalents at beginning of year 684.3 756.9
Effect of exchange rate fluctuations on cash and cash 16.1 (8.2)
equivalents
Effect of other items on cash and cash equivalents1 5.7 (0.2)
Cash and cash equivalents at end of year 561.4 684.3
