Lancashire Holdings Limited

Hello and welcome to the Lancashire Holdings Limited Q1 2024 earnings call. Throughout the call all participants will be in a listen only mode and afterwards there will be a question and answer session. Please note this call is being recorded. Today I'm pleased to present Alex Maloney. Please begin your meeting.

Thank you operator. Good morning everyone. Thank you for joining our call today. I'll just give some brief highlights on the progress that we've made through the quarter and the priorities we have for our business. Paul will then focus on some underwriting progress and then Nati will cover the financials and then we'll go to Q&A. I'm delighted that with the continued momentum in our business delivering another record first quarter. Our long-term strategy is to grow when the underwriting opportunities are strong and we did that again this quarter. We continue to grow our premiums in excess of the positive rate change we see demonstrating real momentum at the right time in the underwriting cycle. Underwriting margins continue to be attractive. Our aggregate rate change of 104% is achieved on the back of multi-year compound rate increases. And as you know, with insurance accounting the way it is, this bodes well not just for this year's profits, but also for the future. I want to touch on the tragic impact of the Baltimore Bridge disaster. In the past, events like this would have had a substantial impact on our ability to deliver strong shareholder returns. Thanks to the work we have done over the last five to six years, this type of event is business as usual, with healthy profit contributions from our diversified product suite. And it means that we're in a position to affirm our full-year guidance for an undiscounted combined ratio of the mid-80s and a return on equity of around 20%. As I look to the rest of the year, we continue to see attractive underwriting opportunities. One of these, Lancashire US, commenced underwriting at the end of the first quarter. You have heard me speak about the attractiveness of the ENS market and I'm pleased to say that the team are making excellent progress already. These risks are the ones we know well. We see the strongest levels of underwriting profitability, and we have trusted people to run the operation for Lancashire in the world's largest insurance market. As I've said before, I'm extremely pleased at this stage in the cycle that we have a healthy balance sheet to allow us plenty of flexibility to underwrite the opportunities we see. We continue to deliver what we said we would do. I'll now hand over to Paul.

Thanks, Alex. From the underwriting perspective, we're extremely pleased with the start to 2024, and there are a number of reasons for this. Firstly, market conditions have remained favourable. As we expected, rate increases have slowed, but importantly, remain positive. Our portfolio of 104% is a testament to this. Also, we continue to grow ahead of rate. Gross written premiums are up 8% and insurance revenue is up 25%. Finally, all underwriting segments grew premiums year on year. This is important as for as long as we can go profitably and take advantage of the stronger pricing cycle, we will do so. We specifically identified property insurance and specialty reinsurance as two areas of continued growth in 2024 and both had really strong growth opportunities in Q1. We have guided to approximately 10% growth for the full year, and given the renewal shape of the portfolio, remain confident in this full year guidance. Lancashire US, another avenue of profitable growth for us, is now open and underwriting business, a real achievement for all those involved to get the operation up and running so quickly, and importantly, in time for Q2 renewal season. More broadly, what has been pleasing to see is that on the whole, market discipline is being maintained. There is certainly more willingness to deploy in certain classes, which does bring increased competition, but thus far, not at the expense of underwriting discipline. As ever, our primary focus will be on rating adequacy. If we believe that rating adequacy exists, then we're prepared to increase our underwriting footprint. Given the compound rate increases we've seen over the past few years, we still see plenty of opportunity to profitably grow our portfolio and add further resilience to the book. I'll now pass over to Natalie.