Lancashire is a provider of insurance and reinsurance products on a global basis. It focuses predominantly on property specialty insurance. Lancashire writes risks within the property, energy, marine and aviation segments of the market and has a group rating from A.M. Best of A minus (excellent).
Lancashire has produced a compound annual return on equity since inception of 17.7 per cent.
In 2008, the percentage of Lancashire’s business written in the four different lines by gross premium volume was as follows:
- Property 47.5 per cent
- Energy 29.0 per cent
- Marine 12.3 per cent
- Aviation 11.2 per cent
Financial highlights for the twelve months to 31 December 2008:
- Fully converted book value per share of $6.86 at 31 December 2008, compared to $6.38 at 31 December 2007, an increase of 7.5 per cent;
- Gross written premiums of $638.1 million. Net written premiums of $574.7 million;
- Loss ratio of 61.8 per cent and a combined ratio of 86.3 per cent;
- Total investment return of 3.1 per cent including net investment income, realised gains and losses, impairments, and change in unrealised gains and losses;
- Net operating profit of $119.4 million, or $0.64 diluted operating earnings per share; and
- Net profit after tax of $97.5 million, or $0.53 diluted earnings per share.
Dividend Policy
Lancashire approved the following dividend policy in February 2009.
“Lancashire intends to maintain a strong balance sheet at all times, while generating an attractive risk-adjusted total return for shareholders. We will actively manage capital to achieve those aims. Capital management is expected to include the payment of a sustainable annual dividend, supplemented by special dividends from time to time. Dividends will be linked to past performance and future prospects. Under most scenarios, the annual dividend is not expected to reduce from one year to the next. Special dividends are expected to vary substantially in size and in timing.”