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1. Company Snapshot

1.a. Company Description

Lancashire Holdings Limited, together with its subsidiaries, provides specialty insurance and reinsurance products in London, Bermuda, and Australia.The company operates through five segments: Property and Casualty Reinsurance, Property and Casualty Insurance, Aviation, Energy, and Marine.It offers property direct and facultative, property political risk and sovereign risk, and property terrorism and political violence insurance products, as well as property reinsurance services; and aviation AV52, aviation consortium, airline hull and liability, and satellite insurance products.


The company also provides marine hull, total loss only, mortgagees interests insurance, mortgagees additional perils, excess protection and indemnity, marine war, and builder's risks; and energy insurance products covering upstream, downstream and onshore operational, and upstream construction all risks business.In addition, it offers general insurance, support, insurance agent, and insurance mediation services.The company was incorporated in 2005 and is headquartered in Hamilton, Bermuda.

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1.b. Last Insights on LRE

Lancashire Holdings Limited's recent performance is underpinned by its attractive financial prospects, with a 3.3% increase in stock value over the past month. The company's robust financials, as evidenced by its strong cash position and low debt levels, have garnered investor attention. Furthermore, Lancashire's ability to generate consistent returns on equity, with a recent rating of 4.5/5 from a leading financial institution, underscores its financial stability. Additionally, the company's commitment to returning value to shareholders through share buybacks has been a notable positive driver, as it reduces the number of outstanding shares and enhances earnings per share.

1.c. Company Highlights

2. Lancashire Insurance Delivers Strong H1 2025 Results

Lancashire Insurance reported a robust first half of 2025, with an annualized ROE of 15% and an upgraded expectation of high teens ROE for the full year. The company's EPS came in at $0.3074, significantly beating estimates of $0.1705. The strong financial performance was driven by positive underwriting results, with an insurance service result of GBP156 million, despite significant industry losses, including the California wildfires. The investment portfolio also generated a strong return of 3.7%, driven by higher yields and falling treasury rates.

Publication Date: Sep -04

📋 Highlights
  • ROE Target Upgrade: Lancashire upgraded 2025 annualized ROE to high teens from 15% in H1 2025.
  • Underwriting Resilience: Generated GBP 156 million insurance service result despite industry losses like California wildfires.
  • Investment Returns: Portfolio returned 3.7%, driven by higher yields and conservative A+ credit allocation.
  • Capital Strength: BSCR ratio at 257%, with GBP 50 million Syndicate 2010 acquisition funded from existing buffers.
  • Growth Strategy: Doubling down on core property reinsurance, U.S. E&S energy liability, and specialty lines with selective expansion.

Underwriting Performance

The company's underwriting success is attributed to a resilient portfolio and focus on profitable growth. Market conditions remain attractive, with healthy pricing and strong demand for Lancashire's products, although some softening is observed. The company is growing selectively, targeting areas with strong margins and focusing on its core strengths.

Capital Position and Management

Lancashire's capital position remains robust, with a BSCR ratio of just over 257%. The company maintains a disciplined approach to underwriting and capital management, focusing on delivering sustainable returns for shareholders. The acquisition of the remaining capacity of Syndicate 2010 is expected to be completed later in the year, with no impact on capital returns in the second half.

Valuation and Outlook

With a Price-to-Book Ratio of 1.33, the stock appears reasonably valued. The Dividend Yield stands at 9.44%, making it an attractive option for income investors. As the company navigates the current market cycle, its focus on profitable growth and capital management is expected to drive sustainable returns. The upgraded ROE expectation for the full year reflects the company's strong performance in the first half.

Growth Strategy

Lancashire Holdings is focused on core property reinsurance clients, expanding the specialty reinsurance play, and building the Lancashire U.S. E&S platform, particularly in energy liability. The timing of aviation contract renewals is expected to influence specialty growth, with the majority renewing in Q3 and Q4.

3. NewsRoom

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Top UK Dividend Stocks To Watch In November 2025

Nov -27

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AM Best Affirms Credit Ratings of Lancashire Holdings Limited and Its Subsidiaries

Nov -05

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3 UK Dividend Stocks Offering Up To 14.0% Yield

Oct -24

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Vivere Partners Appoints Insurance Veteran Linda Ventresca to its Board of Directors

Oct -09

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Is Lancashire Holdings Limited's (LON:LRE) Recent Performance Tethered To Its Attractive Financial Prospects?

Jun -10

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Spotlight On 3 UK Penny Stocks With Market Caps Over £400M

Mar -17

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Lancashire Holdings Ltd (LCSHF) (Q4 2024) Earnings Call Highlights: Strong ROE and Premium ...

Mar -07

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UK insurer Lancashire sees up to $165 million hit from Los Angeles wildfires

Feb -13

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.74%)

6. Segments

Insurance

Expected Growth: 7.92%

Lancashire Holdings Limited's 7.92% growth in insurance is driven by increasing demand for specialty insurance products, expansion into new markets, and a strong underwriting discipline. Additionally, the company's diversified portfolio and robust risk management practices have contributed to its growth. Furthermore, the insurer's ability to adapt to changing market conditions and its commitment to providing innovative solutions have also supported its growth momentum.

Reinsurance

Expected Growth: 5.4%

Lancashire Holdings Limited's 5.4% reinsurance growth driven by increasing demand for specialty insurance products, expansion into new markets, and strategic partnerships. Additionally, the company's strong underwriting discipline, diversified portfolio, and effective risk management practices contribute to its growth momentum.

7. Detailed Products

Aviation Insurance

Lancashire Holdings Limited provides aviation insurance products to airlines, airports, and other aviation-related businesses, covering risks such as aircraft damage, passenger liability, and third-party liability.

Energy Insurance

Lancashire Holdings Limited offers energy insurance products to oil and gas companies, renewable energy providers, and other energy-related businesses, covering risks such as property damage, business interruption, and environmental liability.

Marine Insurance

Lancashire Holdings Limited provides marine insurance products to shipowners, charterers, and cargo owners, covering risks such as hull damage, cargo loss, and liability.

Property Insurance

Lancashire Holdings Limited offers property insurance products to commercial and industrial property owners, covering risks such as property damage, business interruption, and liability.

Reinsurance

Lancashire Holdings Limited provides reinsurance products to primary insurers, covering risks such as catastrophe losses, casualty losses, and specialty risks.

8. Lancashire Holdings Limited's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Lancashire Holdings Limited is moderate, as there are some alternative products and services available in the market, but they are not highly attractive to customers.

Bargaining Power Of Customers

The bargaining power of customers for Lancashire Holdings Limited is low, as customers have limited options and the company has a strong brand presence.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Lancashire Holdings Limited is moderate, as the company has some dependence on key suppliers, but it also has some bargaining power due to its size and reputation.

Threat Of New Entrants

The threat of new entrants for Lancashire Holdings Limited is high, as the industry is attractive and there are low barriers to entry, making it easy for new companies to enter the market.

Intensity Of Rivalry

The intensity of rivalry for Lancashire Holdings Limited is high, as the industry is highly competitive and there are many established players, leading to a high level of competition.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 23.81%
Debt Cost 6.83%
Equity Weight 76.19%
Equity Cost 6.83%
WACC 6.83%
Leverage 31.26%

11. Quality Control: Lancashire Holdings Limited passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Lancashire Holdings

A-Score: 7.5/10

Value: 5.8

Growth: 7.7

Quality: 8.4

Yield: 9.0

Momentum: 6.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Investors Title

A-Score: 6.9/10

Value: 5.0

Growth: 4.7

Quality: 7.9

Yield: 10.0

Momentum: 7.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Employers Holdings

A-Score: 6.0/10

Value: 6.9

Growth: 4.9

Quality: 6.2

Yield: 7.0

Momentum: 2.5

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Tiptree

A-Score: 5.9/10

Value: 8.1

Growth: 7.7

Quality: 6.9

Yield: 4.0

Momentum: 4.0

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
AMERISAFE

A-Score: 5.6/10

Value: 3.5

Growth: 2.2

Quality: 7.0

Yield: 10.0

Momentum: 2.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Trisura

A-Score: 5.4/10

Value: 6.7

Growth: 7.8

Quality: 6.8

Yield: 0.0

Momentum: 2.5

Volatility: 8.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

5.74$

Current Price

5.74$

Potential

-0.00%

Expected Cash-Flows