“Lancashire's strategy since day one has always been to write the most exposure in a hard market and the least in a soft one. There are now abundant reinsurance and retrocession opportunities that allow us to maintain our core insurance and reinsurance portfolios, whilst significantly reducing net exposures and enhancing risk adjusted returns. From our peak exposures in April 2012, when losses had driven substantial market hardening, we have reduced exposures across the board. We will stick to our strategy in the knowledge that when an event comes, we are well prepared through all three of our platforms to take advantage of subsequent opportunity”
Alex Maloney - Group Chief Executive Officer
Lancashire’s strategy is designed to be robust across all phases of the market cycle and with the Kinesis and Cathedral platforms there are multiple ways to maintain or enhance the portfolio
Strategy in action
Underwriting comes first; We focus on maintaining our portfolio structure, with the bulk of our exposures balanced towards market moving events, and a strong commitment to core clients. We use the principle of peer review throughout the Group, usually pre-underwriting for LICL, LUK and Kinesis that accept larger net exposures, and post-underwriting at Cathedral with its much smaller net exposures.
Balance risk and reward; We continue to develop and improve BLAST and other tools to help us understand the drivers of profitability in our portfolio and to understand the kind of events that can impact our earnings or balance sheet. And we continue to refine our risk on/risk off analysis on our investments and look for a balance there too.
Operate nimbly through the cycle; There is a continual process of matching capital to opportunities with a commitment to scale the portfolio down as well as up. We can now use multiple balance sheet strategies to respond to opportunities most efficiently and maintain our relevance to clients through all phases of the cycle.