Bermuda-headquartered Lancashire Insurance Holdings’ reinsurance premiums rose 8.1% year-on-year to $1.2 billion in the 2025 financial year, with each pillar contributing to growth, with group profit after tax falling 9% to $293.4 million due to higher costs due to weather and major loss events.
Gross written premiums (GPW) for the entire business increased 5.1% year-on-year to US$2.3 billion, with the above-mentioned growth in reinsurance premiums benefiting from a slight increase in insurance premiums, which will be US$1.07 billion in 2025 compared with US$1.05 billion in 2024.
In the reinsurance sector, Lancashire noted that with the ratings environment softening slightly, the reinsurance RPI (renewal price index) in 2025 was 97%, compared with 101% in 2024, while the insurance RPI was 95%, down from 101% in 2024, resulting in the group’s overall RPI in 2025 being 96%, compared with 101% in 2024. 2024.
Commenting on the reinsurance business, the company said: “We have taken the opportunity to develop and build relationships and franchise value with our core customers against a backdrop where rating adequacy remains very healthy.”
Lancashire added: “In insurance, market conditions have softened slightly for the first time since 2017, but given seven consecutive years of rate increases, most product lines remain very reasonably priced with built-in underwriting margins.”
Groupwide, insurance revenue increased from $1.8 billion in 2024 to $1.9 billion in 2025, while gross premiums earned as a percentage of gross premiums written were 97.5% in 2025 compared with 95.1% in 2024, which Lancashire attributed to premium income from previous underwriting years in which the business had grown significantly.
Insurance services results will increase from US$380 million in 2024 to US$381 million in 2025, of which the reinsurance segment contributed US$292 million and the insurance segment contributed US$89 million.
Net losses in Lancashire due to catastrophes, weather and major loss events, undiscounted and excluding recovery premiums, amounted to $277 million in 2025, up from $215.2 million in 2024. Of the total losses in 2025, catastrophe and weather losses were $184.7 million, driven by the net loss impact of California wildfires of $163.4 million. Lancashire also suffered a net loss of $92.3 million from large risk events in 2025.
In addition, the company disclosed that the previous accident year loss development for 2025 net change in undiscounted loss reserves was $122.8 million, an increase from $93.3 million in the previous year.
Lancashire said: “This is primarily due to the release of general IBNR, catastrophe and large loss provisions for the 2024 and 2023 accident years, as well as further strengthening of provisions of $32.9 million related to direct and indirect losses related to the conflict in Ukraine.”
The group’s net insurance ratio will increase from 71.3% in 2024 to 73.5% in 2025, with a lower net reinsurance ratio of 60.5%, offset by an increase in the insurance segment ratio to 87.3%.
The discounted combined ratio will increase from 80% in 2024 to 83.7% in 2025, and the undiscounted combined ratio will be 93.1% in 2025, up from 89.1% in the previous year.
Reinsurance premium allocations will be $16 million lower in 2025 compared to 2024, accounting for 22.8% of group insurance revenue, down from 24.9% in 2024, “reflecting more efficient reinsurance procurement as the group seeks to improve efficiencies and benefit from an increasingly diversified underwriting portfolio.”
In 2025, the group’s net return on investment increased to US$218 million, with a total return on investment of 7%, compared with US$162 million and 5% respectively in 2024.
Alex Maloney, group chief executive, commented: “The outstanding results we report today are the result of another successful 12 months for Lancashire, with strong underwriting profits supported by healthy returns on investment.
“Our results in 2025, marking Lancashire’s 20th anniversary, demonstrate the strategic progress we have made in refocusing the business and becoming more diversified across product lines and geographies. We have increased our resilience and significantly reduced earnings volatility. This enables the group to deliver superior results for shareholders and positions the business to capture future market opportunities.”
“Lancashire is a very different business now than it was just a few years ago. Today’s results demonstrate this and our confidence as a management team in continuing to deliver sustainable returns over the coming years. It is important to highlight the quality of people we have been able to retain and attract, which is fundamental to our performance and will continue to be a real competitive advantage for our business.”
“At Lancashire we have always believed in market cycles and successfully managing its different phases is key to creating long-term and sustainable value. Looking ahead, while we expect to be more competitive in 2026, we remain in a healthy position in terms of rate adequacy. We will continue to capitalize on underwriting opportunities with our continued focus on disciplined underwriting and active management of capital and risk exposures.
“We have also invested in the business, including the development of Lancashire America, and through the acquisition of the syndicate’s underwriting capabilities in 2010. This acquisition means we now provide all underwriting capabilities to both syndicates, providing us with additional options within the Lloyd’s platform. Our confidence is supported by our strong capital position and the recent upgrade of our long-term issuer credit and financial strength ratings from A- to A by S&P Global Ratings, which demonstrates the improved financial resilience of the syndicate business.
“In 2025, our growth was consistent with underwriting opportunities, with gross written premiums increasing $109.7 million to $2,259.3 million and insurance services results (underwriting profit) of $381.1 million. Insurance revenue also increased 5.4% to $1,860.4 million. Undiscounted combined ratio was 93.1% in 2025 and 83.7% on a pro forma discount basis.
“Even in a year marked by California’s devastating wildfires – the industry’s largest wildfire losses ever – our after-tax profit of $293.4 million is further evidence of the success of our approach.
“Our strong underwriting performance is supported by the performance of the portfolio, which has grown alongside the expansion of the broader business. In 2025, the portfolio returned 7.0%, or $218 million, making a valuable contribution to our overall profitability, and we expect to continue to generate investment income in the coming years.
“The group’s strong capital position and excellent operating performance mean we are able to invest in the business and return capital to shareholders, and during 2025 we paid a special dividend of $1.225 per share and an ordinary dividend, or $296.5 million. I am pleased to say that in addition to the final ordinary dividend, we have also declared a special dividend of $0.50 per share for the full year 2025. Since its inception, Lancashire has returned more than $3.7 billion to shareholders, including more than 100% in the past two years of profits while still investing and growing the business is fully consistent with our long-term capital management philosophy and we will seek to continue returning excess capital to shareholders while still maintaining our underwriting momentum.
“Of course, we wouldn’t be able to report these outstanding results today without the hard work and dedication of our employees. I would like to thank them all for their support and enthusiasm, and the role they play in retaining the unique and positive culture that we hold so dear. In 2025, we conducted an engagement survey of all employees and the response to the survey was excellent, with 85% saying they were proud to work in Lancashire. Our Bermuda operation was also named the top three employers on the island that year.
“Our strong culture also helps us make a wider positive social impact through financial donations and staff skills, and help those less fortunate. I am delighted to say that since its establishment in 2007, the Lancashire Foundation has now donated more than $24.8 million to charitable organizations, including $800,000 in 2025.
“Lancashire is a unique and high-value business and we will continue to leverage the strong franchise we have built over the past 20 years. I am confident that through our diverse underwriting platform and products, our focus on efficient and disciplined use of capital, and our talented team that thrives in a performance-driven culture, we can look forward to even more success in the future.”
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