LANCASHIRE HOLDINGS LIMITED
9 October 2017
London, UK
Hurricanes Harvey,
Irma and Maria and Mexican earthquakes – Lancashire Group
Preliminary loss estimate
Lancashire Holdings Limited (the “Company” or “Lancashire”)
announces today its range for its estimated net ultimate losses
arising from hurricanes Harvey, Irma and Maria and the two recent
earthquake loss events in Mexico.
The aggregate estimated net ultimate losses for these events is
expected to be in a range of $106 million to
$212 million after anticipated recoveries from its outwards
reinsurance programme and the impact of outwards and inwards
reinstatement premiums. This estimate falls well within the
Company’s modelled loss ranges for these types of catastrophe
events.
The loss estimate includes Lancashire’s exposures through its
Bermuda, UK and Lloyd’s operations
and in respect of the Company’s participation within the Kinesis
third party capital facility.
Lancashire has exposure to
hurricane risk impacting the US and the Caribbean in the following classes: property
retrocession, property direct and facultative, property
reinsurance, cargo, marine and energy. Lancashire’s preliminary
estimates for the loss events noted have been derived from a
combination of market data and assumptions, a limited number of
provisional loss advices, limited client loss data and modelled
loss projections. As additional information emerges,
the Company’s actual ultimate loss may vary, perhaps materially,
from the preliminary estimates announced. The final
settlement of all claims is likely to take place over a
considerable period of time.
Alex Maloney, Group Chief
Executive Officer,
commented:
“The extensive news coverage turned our thoughts to those whose
lives, livelihoods and businesses were devastated by these forces
of nature. As we assess the financial impact of these losses for
Lancashire, these events
illustrate the value of our products to our clients. Lancashire’s
combination of a strong balance sheet and market leading
professional expertise allows us to service the current and future
needs of our clients and their brokers and to meet the long term
expectations of our investors and broader stakeholders.”
Lancashire expects to provide
an update as part of its earnings release covering the Group’s
financial statements for the third quarter due for release on
2 November 2017.
See further the “Note Regarding Forward-Looking Statements”
below.
For further information, please contact:
Lancashire Holdings
Limited
Christopher Head |
+44 20 7264 4145
chris.head@lancashiregroup.com |
Jonny Creagh-Coen |
+44 20 7264 4066
jcc@lancashiregroup.com |
|
|
Haggie Partners |
+44 20 7562 4444 |
David Haggie |
(David Haggie mobile +44
7768332486) |
About Lancashire
Lancashire, through its UK and
Bermuda-based operating
subsidiaries, is a global provider of specialty insurance and
reinsurance products. The Group companies carry the following
ratings:
|
Financial Strength
Rating (1) |
Financial Strength
Outlook(1) |
Long
Term Issuer
Rating (2) |
A.M. Best |
A (Excellent) |
Stable |
bbb |
S&P Global
Ratings |
A- |
Positive |
BBB |
Moody’s |
A3 |
Stable |
Baa2 |
(1) Financial Strength Rating and Financial Strength
Outlook apply to Lancashire Insurance Company Limited and
Lancashire Insurance Company (UK) Limited.
(2) Long Term Issuer Rating applies to Lancashire Holdings
Limited.
Cathedral benefits from Lloyd’s ratings: A.M. Best: A
(Excellent); S&P Global Ratings: A+ (Strong); and Fitch: AA-
(Very Strong).
Lancashire has capital in
excess of $1.5 billion and its common
shares trade on the premium segment of the Main Market of the
London Stock Exchange under the ticker symbol LRE. Lancashire has its corporate headquarters and
mailing address at 29th Floor, 20 Fenchurch Street, London EC3M 3BY, United Kingdom and its registered office at
Power House, 7 Par-la-Ville Road, Hamilton HM 11, Bermuda.
For more information on Lancashire and Lancashire’s subsidiary and
Lloyd’s segment, Cathedral Capital Limited (“Cathedral”), visit
Lancashire’s website at www.lancashiregroup.com
The UK Prudential Regulation Authority (“PRA”) is the Group
Supervisor of the Lancashire Group.
Lancashire Insurance Company Limited is regulated by the Bermuda
Monetary Authority (“BMA”) in Bermuda.
Lancashire Insurance Company (UK) Limited is authorised by the
PRA and regulated by the Financial Conduct Authority (“FCA”) and
the PRA in the UK.
Kinesis Capital Management Limited is regulated by the BMA in
Bermuda.
Cathedral Underwriting Limited is authorised by the PRA and
regulated by the FCA and the PRA in the UK. It is also authorised
and regulated by Lloyd’s.
This release contains information, which may be of a price
sensitive nature, that Lancashire
is making public in a manner consistent with the EU Market Abuse
Regulation and other regulatory obligations. The information
was submitted for publication, through the agency of the contact
persons set out above, at 07:00BST on
9 October 2017.
NOTE REGARDING FORWARD-LOOKING
STATEMENTS:
CERTAIN STATEMENTS AND INDICATIVE PROJECTIONS (WHICH MAY INCLUDE
MODELED LOSS SCENARIOS) MADE IN THIS RELEASE OR OTHERWISE THAT ARE
NOT BASED ON CURRENT OR HISTORICAL FACTS ARE FORWARD-LOOKING IN
NATURE INCLUDING, WITHOUT LIMITATION, STATEMENTS CONTAINING THE
WORDS “BELIEVES”, “ANTICIPATES”, “PLANS”, “PROJECTS”, “FORECASTS”,
“GUIDANCE”, “INTENDS”, “EXPECTS”, “ESTIMATES”, “PREDICTS”, “MAY”,
“CAN”, “LIKELY”, “WILL”, “SEEKS”, “SHOULD”, OR, IN EACH CASE, THEIR
NEGATIVE OR COMPARABLE TERMINOLOGY. ALL SUCH STATEMENTS OTHER THAN
STATEMENTS OF HISTORICAL FACTS INCLUDING, WITHOUT LIMITATION, THE
GROUP’S FINANCIAL POSITION, LIQUIDITY, RESULTS OF OPERATIONS,
PROSPECTS, GROWTH, CAPITAL MANAGEMENT PLANS AND EFFICIENCIES,
ABILITY TO CREATE VALUE, DIVIDEND POLICY, OPERATIONAL FLEXIBILITY,
COMPOSITION OF MANAGEMENT, BUSINESS STRATEGY, PLANS AND OBJECTIVES
OF MANAGEMENT FOR FUTURE OPERATIONS (INCLUDING DEVELOPMENT PLANS
AND OBJECTIVES RELATING TO THE GROUP’S INSURANCE BUSINESS) ARE
FORWARD LOOKING STATEMENTS. SUCH FORWARD-LOOKING STATEMENTS INVOLVE
KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER IMPORTANT FACTORS
THAT COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF
THE GROUP TO BE MATERIALLY DIFFERENT FROM FUTURE RESULTS,
PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH
FORWARD-LOOKING STATEMENTS.
THESE FACTORS INCLUDE, BUT ARE NOT LIMITED TO: THE ACTUAL
DEVELOPMENT OF LOSSES AND EXPENSES IMPACTING ESTIMATES FOR
HURRICANES HARVEY, IRMA AND MARIA AND THE TWO RECENT EARTHQUAKES IN
MEXICO; THE IMPACT OF COMPLEX AND
UNIQUE CAUSATION AND COVERAGE ISSUES ASSOCIATED WITH THE
ATTRIBUTION OF LOSSES TO WIND OR FLOOD DAMAGE OR OTHER PERILS SUCH
AS FIRE OR BUSINESS INTERRUPTION; THE GROUP’S ABILITY TO INTEGRATE
ITS BUSINESSES AND PERSONNEL; THE SUCCESSFUL RETENTION AND
MOTIVATION OF THE GROUP’S KEY MANAGEMENT; THE INCREASED REGULATORY
BURDEN FACING THE GROUP, THE NUMBER AND TYPE OF INSURANCE AND
REINSURANCE CONTRACTS THAT THE GROUP WRITES OR MAY WRITE; THE
GROUP’S ABILITY TO IMPLEMENT SUCCESSFULLY ITS BUSINESS STRATEGY
DURING ‘SOFT’ AS WELL AS ‘HARD’ MARKETS; THE PREMIUM RATES WHICH
MAY BE AVAILABLE AT THE TIME OF SUCH RENEWALS WITHIN THE GROUP’S
TARGETED BUSINESS LINES; THE POSSIBLE LOW FREQUENCY OF LARGE
EVENTS; POTENTIALLY UNUSUAL LOSS FREQUENCY; THE IMPACT THAT THE
GROUP’S FUTURE OPERATING RESULTS, CAPITAL POSITION AND RATING
AGENCY AND OTHER CONSIDERATIONS MAY HAVE ON THE EXECUTION OF ANY
CAPITAL MANAGEMENT INITIATIVES OR DIVIDENDS; THE POSSIBILITY OF
GREATER FREQUENCY OR SEVERITY OF CLAIMS AND LOSS ACTIVITY THAN THE
GROUP’S UNDERWRITING, RESERVING OR INVESTMENT PRACTICES HAVE
ANTICIPATED; THE RELIABILITY OF, AND CHANGES IN ASSUMPTIONS TO,
CATASTROPHE PRICING, ACCUMULATION AND ESTIMATED LOSS MODELS;
INCREASED COMPETITION FROM EXISTING ALTERNATIVE CAPITAL PROVIDERS,
INSURANCE LINKED FUNDS AND COLLATERALISED SPECIAL PURPOSE INSURERS
AND THE RELATED DEMAND AND SUPPLY DYNAMICS AS CONTRACTS COME UP FOR
RENEWAL; THE EFFECTIVENESS OF THE GROUP’S LOSS LIMITATION METHODS;
THE POTENTIAL LOSS OF KEY PERSONNEL; A DECLINE IN THE GROUP’S
OPERATING SUBSIDIARIES’ RATING WITH A.M. BEST, S&P GLOBAL
RATINGS, MOODY’S OR OTHER RATING AGENCIES; INCREASED COMPETITION ON
THE BASIS OF PRICING, CAPACITY, COVERAGE TERMS OR OTHER FACTORS; A
CYCLICAL DOWNTURN OF THE INDUSTRY; THE IMPACT OF A DETERIORATING
CREDIT ENVIRONMENT FOR ISSUERS OF FIXED MATURITY INVESTMENTS; THE
IMPACT OF SWINGS IN MARKET INTEREST RATES, CURRENCY EXCHANGE RATES
AND SECURITIES PRICES; CHANGES BY CENTRAL BANKS REGARDING THE LEVEL
OF INTEREST RATES; THE IMPACT OF INFLATION OR DEFLATION IN RELEVANT
ECONOMIES IN WHICH THE GROUP OPERATES; THE EFFECT, TIMING AND OTHER
UNCERTAINTIES SURROUNDING FUTURE BUSINESS COMBINATIONS WITHIN THE
INSURANCE AND REINSURANCE INDUSTRIES; THE IMPACT OF TERRORIST
ACTIVITY IN THE COUNTRIES IN WHICH THE GROUP WRITES RISKS; A RATING
DOWNGRADE OF, OR A MARKET DECLINE IN, SECURITIES IN THE GROUP'S
INVESTMENT PORTFOLIO; CHANGES IN GOVERNMENTAL REGULATIONS OR TAX
LAWS IN JURISDICTIONS WHERE THE GROUP CONDUCTS BUSINESS; ANY OF THE
GROUP’S BERMUDIAN SUBSIDIARIES BECOMING SUBJECT TO INCOME TAXES IN
THE UNITED STATES OR THE
UNITED KINGDOM; THE
INAPPLICABILITY TO THE GROUP OF SUITABLE EXCLUSIONS FROM THE UK CFC
REGIME; ANYCHANGE IN UK GOVERNMENT POLICY WHICH IMPACTS THE CFC
REGIME OR OTHER TAX CHANGES; AND THE IMPACT OF THE “BREXIT” VOTE
AND FUTURE NEGOTIATIONS REGARDING THE U.K’S RELATIONSHIP WITH THE
E.U. ON THE GROUP'S BUSINESS, REGULATORY RELATIONSHIPS,
UNDERWRITING PLATFORMS OR THE INDUSTRY GENERALLY.
ALL FORWARD-LOOKING STATEMENTS IN THIS RELEASE SPEAK ONLY AS AT
THE DATE OF PUBLICATION. LANCASHIRE EXPRESSLY DISCLAIMS ANY OBLIGATION
OR UNDERTAKING (SAVE AS REQUIRED TO COMPLY WITH ANY LEGAL OR
REGULATORY OBLIGATIONS INCLUDING THE RULES OF THE LONDON STOCK EXCHANGE) TO DISSEMINATE ANY
UPDATES OR REVISIONS TO ANY FORWARD-LOOKING STATEMENT TO REFLECT
ANY CHANGES IN THE GROUP’S EXPECTATIONS OR CIRCUMSTANCES ON WHICH
ANY SUCH STATEMENT IS BASED.