Lancashire Holdings Limited

Hello and welcome to Lancashire third quarter 2024 trading update conference call. The speakers today will be Alex Maloney, Group CEO, Natalie Kershaw, Group CFO, and Paul Gregory, Group Chief Underwriting Officer. I'll now turn over the call to Alex. Please go ahead.

Good afternoon, everyone. Thank you for joining our call today. As always, I'll just give some brief highlights of the progress we've made so far this year. and the priorities we have for our business, Paul will then focus on the underwriting trends, Natalie will cover the financials, and then we'll go to Q&A. It's been a strong nine months for Lancashire. The quality of the business we have built and the talent we have within our organisation together mean that we continue to deliver on our strategy of delivering more sustainable returns for our shareholders. With stronger earnings, we're able to announce another special dividend of 75 cents a share and still remain extremely well capitalized to fund the growth opportunities we see into 2025. The trading conditions in underwriting remain favorable, and as such, we have grown ahead of rate again at 9%. But as many industry commentators have already pointed out, This year, it's seen a heightened loss environment. Whilst Lancashire is not immune to these events, in this context, I'm pleased to say that Lancashire exposures are very manageable. Today, we have provided a range for all Q3 CAT events and Hurricane Milton in Q4. of between $110 and $140 million. As such, we expect to deliver on our ROE guidance and coming towards the top end of the undiscounted combined ratio range. As I look to the rest of the year and into 2025, our core objective remains the same. We continue to see attractive opportunities to deliver superior returns for our investors. As I have said before, I'm extremely pleased at this stage in the underwriting cycle that we have a healthy balance sheet to allow us plenty of flexibility to underwrite the opportunities we see. We continue to deliver on what we said we would do. And with that, I'll hand over to Paul.

Thanks, Alex. 2024 will be the seventh consecutive year of compound rate increase on our portfolio. As anticipated, there has been a stabilisation of rates over the year. This strong base level of rating has allowed us to continue to grow ahead of rate and build out our portfolio. Our strategy of growing in a hardening rate environment to reduce volatility with a more robust portfolio is clearly being demonstrated this year. In an active loss year, we remain very profitable. Market conditions in almost all lines of business continue to have a very solid rating fundamentals going into 2025. Our expectation is that the recent loss activity both highlights the value of the products that we sell, which will always help demand, and also prolongs the disciplined and pragmatic underwriting approach we've seen from the market this year. Looking at insurance and reinsurance separately, we would expect the following market dynamics. We would anticipate marginally greater competitive pressures in the insurance lines, given they started their upward rating trajectory earlier than the reinsurance lines. But let's just emphasise the strong position they are currently in and that the rate adequacy is very good and we fully expect healthy margins to continue. We expect continued discipline in the reinsurance lines. Casualty remains in focus, given continued prior year development and loss trends. Both specialty and property reinsurance have had their share of large loss experience this year, which again will help with maintaining discipline. Our expectation is the market will remain in a position of strong rate inadequacy, and we see opportunities for continued growth. Our extremely healthy balance sheet provides the foundation to support this profitable growth. We're incredibly pleased with our start in the US, and this will continue to be an engine for growth over the next few years. Outside of the US, we see numerous opportunities across our product lines to continue to profitably grow and further strengthen the portfolio. I'll now pass over to Natalie.