Lancashire Holdings Limited

Welcome to Lancashire Q3 2025 earnings conference call. The speakers today will be Alex Maloney, Natalie Kershaw, and Paul Gregory. I'll now turn the call over to Alex Maloney, Group Chief Executive Officer. Please go ahead.

Okay, thank you. Good morning, everyone. Thank you for joining our call today. We're going to take the usual approach. I will give some highlights on the progress the business has made so far this year. Paul will then focus on the underwriting trends Natalie will cover the financials and then we'll go to Q&A. I'm pleased to report that Lancashire continues to demonstrate the strength and resilience of its franchise, delivering robust results in a dynamic marketing environment. I'd like to highlight three key points. Our strategy remains central to our success. We continue to deliver disciplined, profitable growth. Growth premiums are up 7.4% year-on-year, reaching 1.8 billion supported by a diversified portfolio and disciplined underwriting. Even with the sizable industry loss of California wildfires in Q1, our business is in excellent shape with growth delivered by our new US platform and selective growth in our existing lines. You can expect to see more of this throughout 2026. Looking at the market more broadly, the margins remain favorable and most lines of business fundamentally well-priced. As we've talked before, after many years of rate increases, we're now seeing a more competitive market. We have yet to see more meaningful new capital enter the market, rather it being existing players looking to deploy more. It's still more capital in the industry, but it tends to be more disciplined capital. Second, we are actively managing our capital from a position of strength. In addition to our underwriting profitability, investment returns have been strong year to date. Our overall result has enabled us to declare a special dividend of 75 cents per share, reflecting our exceptionally strong capital position whilst retaining capacity to continue to expand the franchise. In addition, during Q3, we completed the minority buyout of Seneca 2010, enhancing our flexibility and future earnings potential. Active management of our capital and risk exposures remain central to our strategy in order to deliver attractive, less volatile returns throughout the cycle. Finally, we look with confidence to 26 and beyond. As I've said before, the quality of the business we have built and the talent we have within the organisation together mean that we can continue to deliver on our strategy of delivering more sustainable returns for our shareholders. I'm extremely pleased that at this stage in the cycle, we have a healthy balance sheet to allow us plenty of flexibility to underwrite the opportunities we see. With that, I'll hand over to Paul to talk you through the underwriting trends.

Thanks, Alex. Earlier this year, we set out our expectations for market conditions and our growth prospects in the context of those anticipated conditions. After seven years of positive rating momentum, we expected 2025 to be the first year of rate softening. Our expectation was that this would be measured softening and that pricing in the vast majority of business lines was to remain very healthy and attractive. With this context, We still expected to grow our premiums, albeit at a slower rate than in previous years. With the natural organic growth we would see from the build-out of our US operations, plus organic growth in established product lines with continued increased demand from clients, we believe that we could deliver low single-digit growth despite the marginal headwinds of softening rates. To date, the market has behaved in line with expectations. as demonstrated with our group RPI of 96%. And we are currently at the upper end of our growth expectations, with growth in gross premiums written at 4.8% if you exclude the impact of reinstatement premiums. It has been very pleasing to continue the build-out of the Lancashire franchise in what will be the eighth year of premium and product line growth. As expected, our growth has been aided by the development of Lancashire U.S. The foundation classes of property DNF and energy liability have continued to mature and we've recently added our third product line being general casualty. Outside of the US, we have measured growth in our reinsurance lines, in particular specialty reinsurance, which has been a growing class of business for us in recent years. As we look forward to next year, it is likely that 2026 will also see rates softening across a number of product lines. We are strong believers in the insurance cycle and it is likely that the supply of capital will outstrip increased demand and therefore there will be competitive pressure. However, importantly, we still believe that underwriting margins across the majority of business lines will remain healthy and attractive. Much like this year, we have options available to counteract the headwind of softening rate. Firstly, our US operation will continue to mature both via our newly established products and also we will continue to add further product lines. Additionally, as Alex has mentioned, we have successfully completed the purchase of the minority buyer of Syndicate 2010. This is simply more of the business we already underwrite and control but will benefit both our top and bottom line.

Lastly, we should never forget that we're a reasonably large buyer of reinsurance

and in a softening market is not always completely negative. We will benefit from a broader, more competitive reinsurance that helps protect our net margin. As a far larger and more diversified business than at the same stage as the cycle last time, we have more reinsurance options and broader, stronger relationships with reinsurers that will allow us more reinsurance flexibility to help navigate the future market cycles. I'll now hand over to Natalie.

Thanks, Paul. Hello, everyone. Despite the California wildfire loss in Q1, I'm pleased to report that Lancashire's franchise continues to deliver a robust performance, underpinned by disciplined underwriting and a diversified portfolio. In my remarks, I'll discuss our insurance revenue, investment returns and capital management, including the special dividend. Following on from the premium growth Paul has outlined, I'm pleased to say that our insurance revenue for the first nine months was £1.4 billion. up 7.8% year-on-year. More of the premium we wrote in recent years is now hitting the P&L as earned revenue, which slightly outpaces the current year's written premium growth, which also includes reinstatement premiums relating to the wildfires. I'll touch briefly on the loss environment. As Alex mentioned, the third quarter was light on major losses for us, and we had no new significant catastrophe loss events in Q3. Although the environment for risk losses remained active, consistent with trends we saw earlier in the year, the relatively benign quarter is in stark contrast to the first quarter of 2025. The absence of major events in Q3 obviously helps our results and puts us in a good position as we head into year end. Overall, our underwriting performance so far in 2025 is solid. This underscores the benefit of our diversified portfolio. Following the Q1 losses, the rest of the year has been manageable. allowing our underlying profitability to come through. The higher interest rate environment continues to benefit our investment portfolio. We achieved a total net investment return of 5.6% for the first nine months of 2025, equating to $170 million of the investment income and gains year-to-date. The portfolio benefited from higher coupon income as well as some valuation gains on bonds. We also saw contributions from our private investment funds and about 20 basis points for return came from foreign exchange gains. The portfolio remains conservatively positioned with an average credit quality of A plus and duration of 2.1 years. Thanks to our performance, our capital position is exceptionally strong. The board has declared a special dividend of 75 cents to be paid in December, which amounts to roughly 182 million in total payout. The special dividend reflects our excellent operating performance year to date and our philosophy of actively managing capital and returning access to shareholders. We are able to do this while maintaining significant headroom for regulatory and rating requirements, with plenty of room to continue to build our franchise. This commitment to maintaining a strong capital base is demonstrated by our ability to additionally deploy capital by completing the buyout, of the remaining third party capacity in our Lloyds syndicate joined Q3, whilst still being able to make significant returns to our shareholders. We invested just under 70 million to take our ownership of syndicate 2010 to 100%. This strategic move enhances our control and flexibility at Lloyds and demonstrates our ability to deploy capital opportunistically without compromising near term earnings or our ability to pay a substantial dividend. In summary, Lancashire is in an excellent position as we head into the final quarter of 2025. We have good momentum and a very balanced portfolio. Year to date, we've shown that even with some large losses early on, we can deliver healthy profits and grow the business. Thank you. I'll now hand back to Alex.

Thanks, Natalie. To conclude, I want to leave you with three key messages. Firstly, Lancashire's franchise remains strong and resilient, delivering disciplined growth and maintaining healthy margins even as market conditions start to evolve. Secondly, our capital position is extremely robust, allowing us to evolve shareholders and invest in future opportunities. And finally, we look to 2026 and beyond with confidence, supported by a talented team, a diversified portfolio, a commitment to delivering sustainable, attractive returns for our investors. And with that, we'll now go to the operator for questions.

Thank you. And if you do wish to ask an audio question, please press the star one on your telephone keypad. If you wish to withdraw your question, please press the star two to cancel. Once again, please press the star one to register for a question. And your first question comes from the line of Will Hardcastle with UBS. Please go ahead.

Hey there. Thanks for letting me take the questions. The first one, you touched on the US platform and the opportunity for next year. I guess, is it possible to get sort of a run rate size of where that is today? And if you just annualize that gross, any sort of touch on quantification for that? I know you touched on it's the maturity of the businesses and the new business lines coming on, but any sort of help there would be useful. And then just touching on the man-made losses in the quarter, it sounds like it's continued from H1. Is it possible to say which lines of business these have arisen in? There was a reinsurer that discussed GL man-made losses as a man-made one, which worried me a little bit, but just touching on that. That'd be great. Thanks.

Hi, Will. It's Paul here. I'll take that first question and read the US. Look, I think similar to what we said at the start of this year, you've got two kind of aspects of growth in the US. It's the lines that we established 18 months ago now. that will continue to mature. And if you think back to when we grew out syndicate 3010, you know, you usually wait at least kind of three years, three to four years before you've got a fully mature book. So on those lines, they're kind of made good progress. We've made really good progress on those this year. They're very established and will continue to grow. We very much anticipate that to be the case next year. I think, as I said in my script, we've added one more product line this year. Our intention is to add further product lines That will obviously always be on the same basis. We always add product lines. We need the right people with the right business plans. But there's numbers of conversations going on all the time on that. So we will fully expect that platform to continue to build out. Much like it has been this year, next year will be one of the engines for growth for us. Obviously, we don't split out the US specifically in terms of premiums, but We called it out this year as an area that would aid our premium growth, and that has been one of the areas that's done that.

So, Will, on your question about losses, I think there was an interesting report that Aon published, I think, this week, talking about the heightened risk environment. So I think what's important is, as the market starts to soften, underwriters don't forget that we are in a heightened risk environment. I think there's been some well-publicized downstream energy losses that you've seen in the last quarter. Obviously, there's some more activity in the airline space. So, you know, losses are still happening. Events are still there. So I think that that's the message that we are, you know, giving to our underwriters. We still need to be disciplined, but there are losses in the quarter. But there's nothing material for us, clearly, but there's definitely some activity.

That's great. Thank you.

And your next question comes from the line of Shanti Kang with Bank of America. Please go ahead.

Hi. Thanks for taking my question. So I was just curious what your expectation is for the upcoming renewal periods, what's going to be the area of focus for you guys, and what pockets you're going to deploy your capital into. And then I saw that the RPI for this quarter was flat versus H1. And I was just curious if you found that. Is that surprising at all to you, or is there any reason why that was actually flat when We're seeing continued conversation about market softening. Obviously, it's a benefit, but just curious there. And then the last question is just on your retro protection. I think you guys are still due to renew that ahead of 2026. How are you thinking about that for the upcoming year? Will you look to increase in areas or decrease at all? Thank you.

Hi, Shanti. It's Paul here. I'll take the RPI one first. I wouldn't read too much into Q3. It's not necessarily a significant quarter for premiums, but I think it's fair to say the conditions that we saw in Q3 were very similar to what we saw in Q2. But as I say, it's not a significant quarter in terms of major renewals. And we're tracking on an RPI perspective exactly in line with what we said at the start of the year, which was we did expect marginal softening. I think 96% RPI kind of would be marginal softening. In terms of the upcoming renewals, I think, as I said in my script, we do think there will be some softening of rates as we move into 2026, as Alex alluded to. There is more competitive pressure because there is more supply of capital. There is still increased demand coming through, though. And we expect softening to be to be measured, but there are still really healthy margins in the vast majority of lines of business. So there are still areas in which we feel we can grow. I think as I just answered in the last question, one obvious area is the US platform. That's an area we continue to grow the existing lines and also add additional lines kind of outside of that. And as we've seen this year, You know, we're still on the specialty reinsurance side. That's something we started to grow out a couple of years ago that continues to mature. I'd expect that to also be an area of, you know, focus next year where we could have continued opportunity to grow. And even on some of the property reinsurance lines, there are still clients out there looking to buy more limit and, you know, underlying rates are still healthy. If we have core clients that want more limit, we will have clients opportunity to grow with them at what are still you know very healthy margins um that probably covers your first question and then your last question i believe is on our own retro yes we we knew the vast majority of our non-marine reinsurance coverage retro coverage at the first of january we're currently in the kind of build up to that um Just like every other part of the market, we expect there to be more competition, which as a buyer is favorable. So we will look at that and we'll look to trade with our core partners through that. I think until we get nearer to the nuts and bolts of renewal, trying to call out exactly what we're going to do now is probably a little premature, but we do expect to have kind of broader, more competitive prices. reinsurance as we move into 2026.

Cool.

That's great. Thanks.

The next question comes from the line of Vash Gosalia with Goldman Sachs. Please go ahead.

Hi. Thank you. Thank you for the opportunity. Two questions from my side. The first one on just your top line growth. So obviously your guidance is low single digit, but feels like you're growing closer to mid single digits. So just trying to think around that as to what should we expect for 2026.1. But also, could you then help us understand how much of this top line growth is just FX benefit? Because I don't think that's been broken out. So it'd be great to know that. The second question is just on the capital side. So obviously, you are in a strong capital position. But as I understand, there are some BMA model changes which are yet to come. So just trying to think around this aspect a bit more quantitatively as to what should we be looking at, which really reflects the strength of your capital. I mean, any color or guidance on this would be really helpful. Thanks.

Hi, Vash. I'll take the first question. I think, and apologies because I'm boring on this, but I always remind everyone, you know, when we give guidance at the start of the year and what we expect, but, you know, we're never driven by a top-line target. We're always driven, you know, by opportunity, and that's something we drum into our underwriters all the time. Look, it's pleasing. We are currently tracking ahead of, you know, we said low single digit. You're correct if you strip out reinstatement premiums we're closer to mid single digit but you know it's not an exact exact science um i'm obviously very happy that there's been opportunity to grow marginally ahead of you know where we guided um i think fx to be honest is relatively immaterial so i i don't think there's there's anything there um to be concerned about when predominantly us dollar premiums

Hi, Bash. It's Natalie. I'll take the capital question. I think, as you can see from the special dividend and the purchase of the syndicate capacity in the same period, we're exceptionally well capitalized. It's something that we focus on all the time. We've always been looking at capital flexibly. Anything that we can't deploy in the short term, we're very active in returning back to our shareholders. But we do like to retain some capital just to give us flexibility for opportunities to rise, such as the purchase of the syndicate. The BMA model changes aren't particularly concerning to us. The BMA BSCR model is not our constraining capital. It's actually a rating agency capital that's more constraining for us. We have been bringing in the BMA man-made risk charges in over the last couple of years, and I think there's one year to go. in our capital disclosures of the half year. I think you could see the impact of that in the investor presentation. And we will be giving a bit more flavour on how we think about capital in our upcoming investor day in December. So you'll get a bit more detail then as well. But the main message is that we remain exceptionally well capitalised.

Got it. I'll just wait for the 2nd of December. Thank you.

The next question comes from the line of Cameron Hussain with JP Morgan. Please go ahead.

Hi, morning everyone. A couple of questions for me. The first one is just on the capital kind of distribution special dividends. How should we think about it? Should we think about, you know, historically in the past you've done Q3, you've done a special and then on occasion you've topped up at Q4 or should we think of it as you've done the Q3 special dividends, you've invested I think very sensibly in syndicate 2010. So that's kind of, you know, the capital you generated this year probably roughly gone, or should we expect maybe a further re-evaluation of this at Q4? And the second question is just on the return on equity guidance. From all your comments, even taking into account, you know, the man-made loss environment, it sounds like Q3 was pretty good, but there's no change to the return on equity guidance. I'm probably reading way too much into that, but I just wanted to confirm that. Thank you.

Hi, Cam. On the special, we looked at the special the same way that we always do. We look at what capital we generated during the year, what we can afford to pay back, as well as retaining some flexibility for the year end as, you know, what reinsurance we purchase, what business we write out one-on-one. This year won't be any different to that. We'll think about the Q4, any potential special in the same way that we've always done. As I alluded to, I think we, as you know, we've always been exceptionally well capitalised and we've always retained a little bit of buffer in there for things such as the syndicate buyout. So I think you almost need to think of the two things kind of separately. The specials we'll continue to think about in the same way as usual. And the syndicate buyout was more as using some of that capital hedging that we've built up over the last few years.

Got it. That's great. Thank you. Yeah, and then, Cam, on the guidance, we gave updated guidance a half year, obviously, when we gave you some numbers and some context of that. But we're very happy where we are. We're very comfortable with the updated guidance where we are today. We've had a decent Q3, but as we've said, there are risk losses around. So I think at this point, we're happy where we are. You know, we can demonstrate that we can return the capital. We're very well positioned for 1.1. So we're not updating our guidance today.

Cam, sorry, it's Jelena. Just to add to that, what we gave you at the half-year stage is very much a framework that helps you kind of think about the ROE. So we gave you you know, on the basis of the same loss environment as you saw in the second half of last year, what the likely outcome would be. Obviously, it's never going to be exactly the same because losses always fall slightly differently, but it's giving you hopefully a good framework of how to think about the likely outcomes this year.

Got it. Thank you, Emma.

The next question comes from the line of Joseph Tienz with Autonomous. Please go ahead.

Hi there. Thank you for taking my questions. Just sort of thinking about your comments there, Jelena, about the ROE guidance. Again, sorry to lay you on about this, but I think, you know, generally the NatCat environment in H2 so far has been more benign than it was last year. So if this continues, can we expect, you know, is it fair to expect sort of an ROE upgrade, you know, kind of closer to what we saw for 2024, which was sort of a 20% mark. That's sort of the first question. Have you had any concerns or change in strategy for your U.S. E&S build-out amid pricing pressure that we've seen in recent quarters from some of the sort of U.S. commercial players there?

Thank you. Sorry, Joe. It's Helena. I think on the ROE point, I mean, there's still two months of the year to go. You've got, I think, a very nice framework. As we sort of say repeatedly, everybody's bonus in the business is dependent on an ROE. We all get remunerated in exactly the same way as our shareholders. So from that perspective, we're sort of fully tied into delivering as good a return as we can. Obviously, there's still two months of the year left to go?

Hi, Joe. On the US, I think the short answer is no, there is no changing strategy. When we went into the US, we understood that we were already going in when market conditions were exceptional. We believe in the cycle. We know there's going to be times in the future when the rating environment is not going to stay at that level. The key to that is employing the right people with the right business plans. that can operate through cycle. So we're not sitting here surprised at all in the fact that some more competition has come back. That's what happens in our market when people make good returns, more competition comes back. So no, there's no changing strategy. The strategy is to employ good underwriters with solid business plans that will fit our culture, fit our underwriting philosophy and have plans that you know, can work through all parts of the cycle.

Okay. Thank you very much, guys.

And the next question comes from the line of Darius Zetkowskis with KBW. Please go ahead.

Hiya. Thank you for taking my questions. A couple of questions, please. The first one, can you give us any color on the buyout of the minority capacity economics? I'm interested in any color on how much you paid, what impact on earnings you expect, etc. The second question is, what would be an appropriate haircut to the IFRS earnings to better apply capital generated in regards to your capital constraint rating agency model? If you can give us any idea, that'd be helpful. And then, Any call in terms of your thinking in regards to your property card exposure, given that they should see the most often in going forward? Thank you.

Hi, Darius. On your question about the buyout, as I said in my script, we paid about $17 million to purchase 100%. And then you can see from, if you look at the syndicate 2010 accounts from last year, we're getting another kind of 20% of that premium compared to what we had last year, which is around about $70 million. So if you assume consistent with last year, and then obviously we expect that business to be profitable. It's almost one way to think about it is almost like the easiest acquisition you can do because we're buying our own business. We don't need any extra people to run it. And it just gives us more flexibility as well going forward. It also aids with things like our own outwards reinsurance purchasing, etc. So it's just a really obvious thing to do with our capital. And we're really pleased that we managed to get that done. Can you just repeat your second question, please?

So obviously IFRS, yeah, sorry, IFRS earnings, you know, are not represented, representing the capital generated in relation to the binding constraints. So I'm curious, you know, if the capital returns are backed by the capital generated on your rating agency model, what's the real number? How much would we haircut the IFRS figures to get to real reflection of sort of capital generated in regards to your rating model? Between the models, right?

So any earnings that we're generating on an IFRS 17 basis will become capital for the rating agency perspective. There's no haircut there. So it's literally just the profit that you make in the year on whatever accounting basis you happen to be on. That generates capital for the rating agency models.

So there isn't a haircut. Okay, thank you.

Hi, Darius. On your last question, Ree, property cat, I think where I'd like to start on that is, yeah, you are seeing competitive pressure in some of the property cat lines, undoubtedly. And as I said in my kind of script, we'd expect that to continue into 26. But again, I'd remind everyone of there were quite significant strides made in both terms of pricing and more importantly, retention levels for that product. rather than in 2023. And whilst we do anticipate some pricing pressure from those very robust margins in 26, we do anticipate retentions holding, which is, in our opinion, incredibly important. So with that kind of context, I think Alex said on our last earnings call, even with the buyout of Syndicate 2010, we don't anticipate our net cap footprint increasing. going into 2026, and that remains the case here today. I think, as always, the 1st of January is a significant renewal period for that class of business, but it's also, as I answered on a previous question, the main renewal date for our own outwards protection on our catastrophe book. And obviously, when we look at things, we look at what's happening on our inwards book, but also what we can achieve in terms of renewal protection and look at the blended net results. So I don't anticipate us growing our net gap footprint going into 2026. We do believe there's still good margin. I think we're probably better positioned to answer that question post 1.1 when we have far more line of sight. But as I said, I wouldn't expect us to grow in that area.

All right, thank you. And the next question comes from the line of David Hussain with Pan Europe Librarian. Please go ahead.

Oh, hello. Hi, everyone. I think I've still got three questions outstanding. The first one is pricing. I'm just trying to get a flavor of where the pricing levels in terms of adequacy sit today by the sort of key lines that you're pricing in terms of how far does pricing need to soften today? further before it becomes sort of inadequate or reaches breakeven levels. So any, any color on that, please. That's the first question. And then the second one is just on growth. Um, so at the current pricing levels, are you, do you think you can see sufficient organic growth across the lines that you're focused on or indeed the lines that you've just talked to in terms of pivoting to in terms of the new lines? Uh, and I'm wondering, I guess, really, um, would you consider M&A at this point in the cycle and given the strength of your balance sheet? And then just finally, coming back to the ROE, but not for this year, but for the outer years and 26 in particular, just wondering how we should think about that. So investment returns are clearly strong. You're benefiting from asset leverage, but that's countered by some further moderation in pricing and growth of the top line as well. Does that sort of, when I tie that together, In your mind's eye, does that land in sort of mid to high teens ROE or sort of higher or lower than that? Any colour on that, please.

Thank you. On pricing, I think, you know, as I said in my script, you know, through the course of this year, the vast majority of product lines still remain, you know, very well priced, health and healthy and robust margins in pretty much all lines. There's always the odd exception, and my upstream energy underwriters don't thank me for always calling out that class of business, which currently is 25% in size of what it was at its height when rating was really good. So there are some areas where we believe there isn't the opportunity to grow, but in the vast majority of lines that you've seen this year, we have been able to you know, still growing incrementally this year and that's a sign of us believing that in the vast majority of product lines there's good margin. I don't think I can sit here and go through each individual line of business. Our anticipation for next year, as we've already said, is that we're likely to see some more softening. It will differ by product line. And I think, as we always do, we kind of give a bit more guidance at the year end when we've been through 1.1. We can give you some updated guidance on growth expectations and also our expectations on market conditions, just like we did at the start of this year.

So on your question about M&A, I think we've always been very clear that we're happy to look at things. Most things we look at, the answers don't, quite frankly. As Natalie said, the acquisition of the buyer of the names of 2010 is a small bit of M&A for us, but a book of business we know. So it's an interesting market. You've seen some activity recently. Generally, our view is that M&A It's an opportunity for Lancashire because it can displace people. So we're going to see what happens in the next couple of quarters. And we've always got an open mind to everything, but we're equally incredibly disciplined about M&A and Lancashire will always take its own path and just won't sort of jump on the back of a trend. if that trend sort of happens from here. So there may be opportunities. It's an interesting market. We're always looking for people and products and, you know, and that may mean different things, but we'll always be incredibly disciplined about it.

Hi, Abid, it's Natalie. On your 2026 ROE question, we are intending to give from formal guidance to 2026 ROE with the Q4 results. you're definitely thinking about it in exactly the right way with what you said, and there's nothing there that you're missing, so I think you're probably on the right line.

Okay, great. Thank you.

And once again, if you would like to ask a question, please press star 1 on your telephone keypad. The next question comes from the line of Andreas van Evden with Bill Hunt. Please go ahead.

Yes, good morning. Thank you. Just two quick questions. One on the syndicate buyout. I think you've now combined around 800 million of stamp capacity at Lloyds, if I'm not mistaken. I just wondered whether you would expand that. that stamp capacity into 2026, or whether you would first consolidate the syndicates and look to grow syndicate stamp capacity in 2027. And my second question is on the casualty book. On casualty reinsurance, just wanted to check reserve quality. There's more noise around underwriting years 2022 to 2024. We've seen some reserve additions across insurance portfolios in the U.S. recently. I just wonder whether you're still comfortable with your loss picks given where claims inflation is and whether there's still enough headroom in your reserve buffers on the reinsurance side. And on the insurance side, I don't know whether I picked this up correctly, but are you entering the general liability market in the U.S.? And if so, why now?

Thank you. So, Andreas, because of the way the Lloyds business plan process works, you know, we've already submitted our 2026 business plans to Lloyds and they are on individual basis. So we'll run Tumica 2010 and Tumica 2010. Separately during 26, but obviously all the capital is now Lancashire. What we do past that, we haven't decided yet. Obviously, owning all that capital does give us more flexibility. And obviously, when you're talking about stamp capacity, again, I can't emphasize enough that we are the company that underwrites the underwriting opportunity. So if we think we need to increase our stamp capacity, we will look to do that. we also still have a UK platform as well. So if something happened that we wasn't expecting, which meant we wanted to write more income, we could always do that inside Lloyds or outside of Lloyds. And obviously, Lloyds are very flexible in the approach of, you know, if we wanted to up our capacity, I'm sure we could have that conversation. So no firm plans for 26 to change the structure of the two syndicates we have. That may change going forward, but we haven't made that decision yet.

Hi, Andreas. On your two questions on casualty, on the casualty reinsurance book, yes, we've obviously seen a lot of the commentary around more recent years. As we've said before, we've come from a very prudent position in terms of reserving. That hasn't changed. We remain very comfortable with how we've reserved. We still believe there is good margin to be had over time from the business that we have underwritten. But as we said before, we will continue to take a prudent approach to reserving of that class, given its long-tail nature. But in summary, we're very comfortable with the reserving position that we have. You are right. On the general liability side, we have recently added an underwriter and some additional underwriting team to support him from our US operation, which is general liability insurance. Firstly, we believe we've hired a good underwriter that thinks about underwriting in the same way we do we also believe there is an opportunity in that market you're still saying strong great momentum um i know some others are going the other way but if you look at a number of the lines of business we added you know over previous years it's generally when other people seem to be pulling out and that's what creates the opportunity and the rate momentum So we fundamentally believe we've got the right person with a strong business plan. We will take the same approach on that in terms of prudent reserving as we have done on our casualty reinsurance portfolio. But we do believe there's an opportunity to build up a small book of general liability insurance from the U.S. operation.

Okay, thank you. And this is all E&S casualty rather than admitted market, right?

Correct.

Okay, great. Thanks.

And the next question comes from the line of Daniel Wilson with Morgan Stanley. Please go ahead.

Morning, guys. Thank you for taking my questions. Just two quick ones, hopefully quick for you guys. On specialty reinsurance, I've noticed that obviously you said that was a key proponent of your growth in the reinsurance division, but I've seen others also talking about growing in this line. So just wondering if you're seeing any competitive pressures there or if you can talk about any trends you're seeing in that line of business. And then on the U.S. build-out, clearly that drove a very high growth in your insurance division this quarter in discrete Q3. I'm just wondering how you're feeling about the, I guess, sustainability of that growth or how you're feeling about the U.S. build-out growth relative to your expectations year-to-date. If you could talk a little bit about that, that would be great. Thank you.

Yeah, sure. On specialty reinsurance, you're correct. There is competitive pressure there, much like we're seeing in a number of lines of business. But again, there's still good, healthy margin in the majority of those products. And there will be opportunities for us to grow with core clients that we've developed over the last few years. So we still believe there will be opportunities to kind of develop that book in 2026. Kind of on the discrete Q3, kind of change in premiums, I wouldn't focus on it too much in terms of a trend, to be honest. We often have things move from quarter to quarter. We think about it in terms of Our annual growth and when we give guidance at the start of the year, that's how we think about it. And currently, obviously, we're tracking slightly marginally ahead of the kind of low single digit. We have had some large accounts move from Q2 to Q3, which is more driving kind of the Q3 growth. It's not necessarily related to the US. There's also some classes of business like political risk that are very much one-off contracts. And if you have a couple of those in a quarter, you know, that can, particularly in a low premium quarter, that can skew things. So there's no fundamental underlying trend in terms of Q3. I'd focus more on where we are tracking versus our kind of annual guidance of low single digit.

Thank you.

And we have no further questions at this time. I would like to turn it back to Alex Maloney for closing comments.

Okay, thanks for all your questions today. I thought we were close to cool down.

Thank you, presenters. And ladies and gentlemen, this concludes today's conference call. Thank you all for joining me now. Disconnect.