Annual Report 2020

Our Future

Non-Executive Chairman's statement

“As we enter 2021, our capital resources and risk appetites are matched to the current exciting market opportunity.”

Group Chief Executive Officer's statement

“We have laid robust foundations for an exciting period of growth as we enter a better priced ‘harder market’ in 2021.”

Group Chief Financial Officer's statement

“Our successful capital raise during the year provides the platform on which we can continue to grow our business to take advantage of positive market opportunities in 2021.”

2020 HIGHLIGHTS

Delivering resilience for shareholders

  • Change in FCBVS (previously termed ‘RoE’)

    10.2% 2019: 14.1%
  • Total investment return

    3.9% 2019: 4.9%
  • Total shareholder return

    -1.4% 2019: 34.3%
  • Combined ratio

    107.8% 2019: 80.9%
  • Profit after tax

    $4.2m 2019: $117.9m
  • Gross premiums written under management

    $1.1b 2019: $934.8m
  • Change in FCBVS (previously termed ‘RoE’)

    10.2% 2019: 14.1%
  • Combined ratio

    107.8% 2019: 80.9%
  • Total investment return

    3.9% 2019: 4.9%
  • Profit after tax

    $4.2m 2019: $117.9m
  • Total shareholder return

    -1.4% 2019: 34.3%
  • Gross premiums written under management

    $1.1b 2019: $934.8m

BUILDING ON STRONG

Foundations

The talents of our people set us apart from our competitors

25 YEARS average industry experience among senior underwriters

GROSS PREMIUM WRITTEN BY SEGMENT

Our focus is on short-tail, specialty (re)insurance risks within four general segments: Property, Aviation, Energy and Marine.

WE HAVE BEEN BUILDING OUR TEAMS TO STRENGTHEN OUR CAPABILITIES

“Having the right team allows us to offer tailor-made, bespoke risk solutions, while our significant experience helps generate returns. We believe that maintaining the right balance between discipline and creativity is key to our success, coupled with a strong focus on profitability and risk selection.”

Paul Gregory – Group Chief Underwriting Officer

Building On

Opportunity

We are responding to the improving market opportunity

CUMULATIVE RPI CHANGES SINCE
2015

“We have witnessed double-digit percentage rate increases in many of our lines of business, and accelerated rating dislocation in the catastrophe- exposed reinsurance lines. Current market conditions present an attractive opportunity for growth, consistent with our strategy of deploying capital in line with the insurance market cycle.”

Alex Maloney – Group Chief Executive Officer

Building For

Growth

We’re positioning the business for organic growth, opening new lines of business and retaining more risk

$340.3m equity capital raised in 2020

ACTIVELY MANAGING EXPOSURE DEPENDENT ON MARKET CONDITIONS

OUR PLAN FOR 2021

  • Consistent
    strategy

    Our long-term strategy remains consistent: deploy more capital into a ‘hardening’ market, contract in a ‘softening’ market.

  • Attractive 2021
    opportunity

    Building blocks in place to take advantage of an attractive opportunity in 2021 to grow our revenues.

  • Being there for
    our clients

    Our three market-leading platforms drive our long-term success: Lancashire Insurance companies, Lancashire Syndicates and Lancashire Capital Management.

  • Strong risk
    selection

    Our daily underwriting call, strategic overview of risk and active management of exposures have proven they lead to long-term success.

  • Superior risk/return
    profile

    Focus on delivering superior Change in FCBVS (previously termed RoE) above peer averages and a resultant strong total shareholder return.

  • Active capital
    management

    We aim to carry the right level of capital to match attractive underwriting opportunities, utilising an optimal mix of capital tools.