7th Aug 2025 13:15
(Alliance News) - Lancashire Holdings PLC on Wednesday cut its dividend after pretax profit declined in the first half, but stressed the firm's "resilience" and raised its full-year expectations for return on equity.
The Bermuda-based insurer posted USD118.6 million in pretax profit during the six months that ended June 30, nearly half the USD213.6 million it delivered for the prior year.
Lancashire pointed to net losses from "catastrophe, weather and large loss events" of USD211.2 million, multiplied from USD44.0 million in the first half of 2024. A loss of USD172.0 million was attributed to "catastrophe and weather losses" including the California wildfires.
The firm said the wildfire loss estimate was unchanged from guidance issued in May, which put the figure somewhere between USD145 million and USD165 million. Around USSD39.2 million was lost on other "large risk events", none of which were "individually material" to Lancashire, it said.
Gross premiums written came to USD1.36 billion, 5.8% ahead of USD1.28 billion the previous year.
Insurance revenue rose 8.2% on-year to USD930.1 million from USD854.1 million. This was offset by 68% higher insurance service costs, which surged to USD792.1 million from USD472.2 million a year ago.
Lancashire reduced its interim dividend per share by 38% to 40 US cents from 65 cents. Diluted earnings per share were down 46% to 44 cents from 82 cents.
Despite what it described as "one of the costliest wildfire disasters ever recorded", Lancashire remained confident in its "ability to deliver attractive returns even in a challenging loss environment".
Looking ahead, the firm expects a return on equity in the high-teen percentage range, updated from previous guidance for a return in the mid-teens.
"Our strategy to grow at the right time in the cycle means we are better positioned, across various classes and geographies, than ever before.
"We have developed a robust, diversified and capital-efficient underwriting portfolio that can absorb the impact of significant industry loss events whilst delivering more predictable returns," said Chief Executive Alex Maloney.
Lancashire shares traded up 0.6% at 637.00p on Thursday afternoon in London, and have risen 6.2% in the past 12 months.
By Holly Munks, Alliance News reporter
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