Loss ratio of under 40% in claims-ridden period
Lancashire Holdings hailed a strong performance in the first quarter of the year despite extensive industry losses in the period and soft rates.
The insurer reported a loss ratio of 38.9% and a combined ratio of 61.2% for the quarter. Gross written premiums were $186.7 million, up over 3% compared to last year.
Richard Brindle, Group Chief Executive Officer, said: “I am extremely pleased to report a very strong performance by Lancashire. In the first quarter the industry suffered a number of severe property risk losses. Lancashire is a major insurer in this sector. It is therefore a great testament to our underwriting team that Lancashire has produced a 39% loss ratio in such a challenging period.
“Our estimated loss from the property risk events in the first quarter is between $20 and $25 million, gross and net. In the context of losses in this sector estimated at up to six billion dollars, together with cat losses of approximately three to four billion dollars, this is solid evidence of our underwriting strength.”
Brindle added: “Losses from the credit crisis are accelerating. The investment markets are rightly cautious about the financial consequences for insurers writing D&O or E&O risks, or holding investment classes suffering material write-downs. Lancashire is not one of these companies. We do not write insurance classes exposed to credit crisis losses and we maintain a particularly unadventurous investment portfolio. We made the decision in late 2007 to exit all non-agency structured product sectors.
“The carnage of the first quarter confirmed that was absolutely the right thing to do. Investors should take great comfort that our balance sheet is stronger than ever.”
