Lancashire (LRE) Q1 2025 TU earnings summary

Executive summary

• Gross premiums written rose 12.7% year-over-year to $712.1 million for Q1 2025, with insurance revenue up 8.7% to $458.9 million.

• Underlying premium growth reached 7% in Q1 2025, ahead of rate, with disciplined underwriting and capital management.

• Group Renewal Price Index (RPI) for Q1 2025 was 97%, indicating marginal rate softening.

• The business continues to invest in talent and expand its U.S. platform, with 45 promotions in the past year and new hires to support growth.

• The company is positioned to capitalize on opportunities and maintain strong returns amid a favorable but slightly softening market.

Financial highlights

• Gross written premium growth for Q1 was 6.6% excluding inward reinstatement premiums, with overall insurance revenue up 8.7% year-over-year.

• Reinsurance segment gross premiums written increased 20.7% year-over-year to $482.3 million, while insurance segment declined 0.9% to $229.8 million.

• Total investment return for Q1 2025 was 1.9%, driven by income, valuation gains from falling treasury rates, and strong private investment fund performance.

• Regulatory ECR/BSCR ratio stood at 271% as of 31 December 2024, reflecting strong capitalization.

• Exposure to California wildfires remains within prior guidance ($145–$165 million), with no subrogation benefits included in reserves.

Outlook and guidance

• Guidance for low single-digit gross written premium growth for 2025 is maintained, reflecting a marginally negative rating environment but continued business build-out.

• Expectation to deliver a mid-teens ROE for 2025 even in a severe loss year, including California wildfires.

• No significant change anticipated in the underwriting portfolio or appetite for the remainder of 2025.

• Management remains focused on profitable growth and maintaining adequate rating levels.