Lancashire Holdings Q3 losses driven by 'unusually frequent run' of catastrophes
Insurance and reinsurance firm Lancashire Holdings said on Thursday that a series of natural calamities had impacted the group in the third quarter.
Lancashire said the insurance industry had seen a mix of both natural catastrophe losses and "an unusually frequent run" of non-natural catastrophe risk losses since reporting back in July.
The FTSE 250-listed firm's specialty lines business also expects single risk losses to be around $30.0m, above the insurer's usual attritional guidance.
Third-quarter losses were predicted to be in the range of $65.0-75.0m, primarily attributed to hurricanes Laura and Sally, the Midwest derecho, and the wildfires across the west coast of the US.
However, Lancashire stated that its Covid-19 loss estimates of approximately $42.0m was unchanged since July and stated that gross written premiums had increased 14% year-on-year in the nine months ended 30 September to $658.7m.
Premium rates increased across its business portfolio, with repayment protection insurance of 117% for the quarter and 112% for the year as a whole.
Chief executive Alex Maloney said: "As insurers, we expect to support our clients and to pay covered losses when they occur, and the sequence of both natural catastrophe and risk loss events during the year so far has impacted our, and the industry’s, profitability for the year to date.
"I would expect this to put further impetus on the industry to charge an adequate and sustainable price per unit of risk. Pricing, particularly in capital intensive lines of business, has increased significantly and I expect rates and terms of coverage to improve throughout 2021 in most of our core business lines."
As of 1110 GMT, Lancashire shares were untraded at 648.0p.