Lancashire is committed to understanding risk and helps companies and people around the world to deal with the various threats that our societies face.
We deal with the effects of unexpected events, including major disasters like earthquakes, floods, windstorms and terrorist attacks. Our industry plays a unique and vital role not just in repairing damage, but in giving the confidence to invest, or to start a new enterprise. The Lancashire Group values its relations with, and works to support, its stakeholders to ensure the success of the business.
As a business focused on understanding global risks, we understand all too clearly the impact of climate change on the world. We actively monitor and manage our catastrophe risk accumulation by setting risk limits based on probable maximum loss (PML) estimates and purchasing catastrophe reinsurance cover. The Group’s exposures to certain peak zone elemental losses, as a percentage of tangible capital, including long-term debt, are shown below. Net loss estimates are before income tax and net of reinstatement premiums and outwards reinsurance. The exposure to catastrophe losses that would result in an impairment to the investment in associate is included in the figures below.
|100 year return period estimated net loss||250 year return period estimated net loss|
|$m||% of tangible capital||$m||% of tangible capital|
|Gulf of Mexico1||Hurricane||163.2||13.2||242.8||19.6|
|Non-Gulf of Mexico – U.S.||Hurricane||110.2||8.9||241.6||19.5|
|Pacific North West||Earthquake||22.7||1.8||73.1||5.9|
Our environmental footprint is not as significant as some other sectors as we are a service industry and predominantly office-based. However, we do take care to limit our use of resources, with an effective waste management system in place, and to manage our environmental impact by measuring and offsetting our carbon emissions. The Company's carbon footprint, calculated between 1 January 2018 and 31 December 2018, was 2,129.8 CO2 tonnes. In accordance with ISO 14064 standards, the Company's carbon figure measures scope 1 and 2 emissions, to include direct and energy indirect emissions. The Company measured and offset its Scope 3 emissions relating to business travel and other indirect emissions. The Company used the number of full-time employees (FTE) as its intensity metric and determined an intensity ratio of 9.8 tCO2e per FTE.
The Company has offset its carbon emissions through an organised programme with EcoAct . The Group is carbon neutral and dedicated to exploring initiatives that ensure we limit emissions, and positively manage our footprint.
Lancashire Insurance Company Limited has endorsed the Association of Bermuda Insurers and Reinsurers’ Policy Statement on Climate Change.
Ours is a document-based industry but we mitigate this by signing up to e-trading initiatives, having recycling bins and shredders around the office, encouraging double-sided printing and providing frequently used documents on our intranet.
Meeting our clients, investors and reinsurers is important to us and we travel extensively around the world to do so. However, for internal meetings we make as much use as possible of video conferencing - the daily Underwriting and Marketing Conference Call and the fortnightly Risk and Return Committee are good examples.
Our office buildings (of which we are tenants) have smart technology to reduce energy usage, and we encourage colleagues to turn off unused electrical equipment. Our London offices have fuel-cell on site, solar panel roofing and full energy metering on site. The Group's UK operations continued to achieve BREEAM excellence for the offices at 20 Fenchurch Street in 2017.
Since its foundation in 2005, the Lancashire Group has focused on fostering relations with a broad range of stakeholders, including our shareholders and our employees, who support our policyholders who rely on the (re)insurance products we sell.
Every company says it, but we truly believe that the talents of our people set us apart from our competitors. So we strive to attract and retain the very best employees in the insurance industry. Lancashire devotes time and attention to delivering an effective recruitment process. Once on board, we encourage employees to stretch themselves and perform to the highest standards. While expectations are high, we manage and support our people both to meet our business requirements and develop their own skills in a supportive environment.
Rewarding our employees
Our staff receive a wide range of quality benefits, including competitive salaries and bonuses, pensions, private healthcare and a number of other incentives. We are also keen to ensure our employees work in a dynamic and collegiate environment.
Promoting diversity in the workplace
The Group promotes an inclusive, collegiate and positive environment that recognises and values diversity as a key to enhancing individual development and maximising business effectiveness. The Lancashire Group is currently represented by employees from over 13 different nations. We are committed to being an equal opportunities employer. New staff receive equal opportunities training during their induction, and the Group is committed to providing a working environment that is free from any form of bullying or harassment. We also support the ‘Ban the Box’ campaign, an initiative from Business in the Community to give ex-offenders better employment opportunities by calling for the removal of tick boxes from employment application forms that ask about criminal convictions.
As a premium listed company on the London Stock Exchange, Lancashire understands the importance of its obligations to shareholders. We work hard to foster good investor relations and pride ourselves on having an active programme of engagement with our diverse shareholder community around the world.
Policyholders are central to our business, so understanding and serving their commercial requirements is at the forefront of everything we do. Through our range of underwriting platforms, we strive to offer clear, fair priced and useful products that continue to meet our policyholders’ insurance and reinsurance needs across the cycle. In the event of a loss occurring, we remain responsive in order to provide our policyholders with ongoing support and seek to pay their claims as expeditiously as possible, knowing the importance of providing an excellent service.
We are fully committed to supporting a broker market and to maintaining a strong working relationship with the largest global broking firms, as well as individual brokers. The Group depends on brokers to distribute its products and actively assesses these relationships to ensure that it continues to be viewed as a trusted partner and provider of solutions for their clients’ (re)insurance needs.
Communities and Society, including the Lancashire Foundation
Lancashire is strongly committed to giving back to the communities within which it operates, both locally in the UK and Bermuda and also further afield. The business seeks to help those who are in distress or at a disadvantage, through continued support of local initiatives and activities and fundraising events. We utilise the talent and energy of our staff in helping others, positively impacting society and creating a more sustainable environment. In turn this stimulates a positive culture amongst staff and promotes Lancashire as an ethical and compassionate employer.
These goals are primarily achieved through the work of the Lancashire Foundation.
Government and regulators
In an industry that is subject to strict regulatory supervision and oversight, Lancashire recognise the need to work closely and openly with all relevant regulatory bodies. We place great importance on the relationships we have with our regulators and engage actively with them.
Lancashire maintains a positive relationship with three major rating agencies: A. M. Best, S&P and Moody’s. These agencies assess and rate the creditworthiness and claims paying ability of the Group’s insurance subsidiaries. These ratings allow the Group to write business successfully in all major global insurance markets and to comply with reinsurance contracts under which the Group is reinsured, as well as its credit facilities which support underwriting obligations.
The Group contracts with a number of third parties for the provision of important services to help run its business. Having developed excellent relationships with its service providers, Lancashire is able to work collaboratively with them. This helps us to respond to technological advances and to develop internal systems and infrastructure to operate efficiently.
The Group has in place a number of long-term debt and financing arrangements with lenders which help to support and fund its underwriting operations and to comply with regulatory capital requirements. The Group’s solid relationships with its lenders allow it the flexibility to respond to changing business and economic conditions and to raise capital.
Lancashire’s dynamic and successful business culture is based on a common understanding of strategic goals across the Board and the business fostered by effective, direct and reciprocal communication. Responsive governance requires clear communication, constructive challenge and debate and creative thinking through a diverse range of perspectives and experience, which serves and balances the expectations of a broad range of stakeholders.
Lancashire Holdings Limited is a premium listed company on the London Stock Exchange, which measures its corporate governance compliance against requirements of the UK Corporate Governance Code published by the Financial Reporting Council.