Lancashire Share Discussion Threads

[justiceforthemany] 16/1/2025 16:34

Judging by the rise in share price limited exposure to LA.

[sigmund freud] 13/1/2025 15:19

thanks Knocker.
this is one of probably many articles on the matter. credit to state farm for dropping 70% of their cover in pacific palisades only last year.

hxxps://apnews.com/article/california-wildfires-los-angeles-insurance-6fbb51bd3060743da0638baf4cf2845d

so the average home price in pacific palisades was $3.3m(!) but the FAIR plan only goes up to $3m and only covers actual losses not replacement. and i see companies can now quote based on effects of climate change. JPM stating the primary insurers are more likely to be exposed to losses than the re-insurers.

every year i feel i get screwed by insurance which is why i hold a lot of insurance companies.

no crash in price this morning and there are people out there who know much more than us about the exposure.

price still in an uptrend. personally though i need be bit more confidence before increasing exposure

[1knocker] 13/1/2025 12:08

Domestic bricks and mortar Insurance premiums were already high in LA. A lot of people hadmoved their insurance to a cheaper scheme run by the insurers collectively which provides much more limited cover, but at a significantly lower premium.

No doubt the insurers resented having to fund such a scheme when it ws introduced, but will now be grateful that they did, and wishing that even more of their customers had transferred to it. They will have lost some premium income, but saved enormous amounts on pay outs - and people renewing policies all over the country will be encouraged to pay the big premiums for full cover!

[sigmund freud] 13/1/2025 12:05

i note on AHT thread that plant /machinery costs are estimated to be around 15% of the rebuild costs. but i don't like the look of the short term AHT chart. any other ideas?

[sigmund freud] 13/1/2025 11:31

lots of the initial quoted losses so far in the media will be based on the house prices. however if the US is anything like UK, the rebuild costs will be much lower than the estimated selling prices. because the land values there are (were?) very expensive. there will be lots of infrastructure costs such as gas mains etc but that might well come under state costs. suspect there are a lot of the contents that might have been underinsured. a lot of people in LA "live the dream" but it is all on credit. lots of people buy cars on credit so the motor finance insurance would cover those losses. same with all the other belongings.
the costs of putting everyone up in hotels and rentals is another matter. it'll be years before they all get somewhere to call home again.
which companies are going to make money out of all the rebuilding and the rentals?

[reallyrich] 13/1/2025 11:18

Would be nice to get a statement of some kind ref any exposure to the fires

[1knocker] 12/1/2025 15:08

An event like the LA fire is excellent free advertising for insurers.

If LRE is not on the hook, or not on the hook for a significant amount, it will benefit - firmer premiums, more people willing to pay for insurance.

Home insurance premiums have been rising in the USA, especially in high risk areas. In really high risk areas, a lot of insurers have withdrawn from the domestic market altogether. One of the problems for the poor folks who have been burned out is that even if they are insured and can rebuild, they may well find that their rebuild is uninsurable at any price they can afford to pay.

[justiceforthemany] 10/1/2025 22:54

I have read total insurance cost around £10Bn.
CNBC have named the insurers and this has not been named so far.

[novision] 10/1/2025 16:27

estimated insured (rather than gross) losses for LA c8bn I read. but obviously not very clear atm.

During the first nine months of 2024, the Group experienced net losses (undiscounted, including reinstatement premiums) from large risk events totaling $72.8 million. None of these were individually material for the Group, with the MV Dali Baltimore bridge collision loss being the most significant. [from the trading update Nov/24]

I think the overall insured hit was $350m on the bridge, despite the $4bn number.

[j2m] 10/1/2025 16:16

Baltimore Bridge was an estimated 4B hit to insurers. For LA Fires I heard 140B mentioned! How much exposure LRE have we don't know but certainly any special dividends again this year must be off the table now.

[novision] 10/1/2025 16:07

I've dipped my toe. Had an entry point of 605p but with it going xdiv in a month thought I might as well test the waters. General consensus is for a price target over 700p. No idea on impact of LA fires, hence small position.

[sigmund freud] 10/1/2025 15:53

looking at the last annual report, they cover casualty, property and speciality re-insurance (that is where the marine, energy and aviation cover is), plus insurance for the same.
The last report talks of opening a US arm (which covers the property part) in 2024.
Insurance covers the bricks and mortar. Problem in California is endless years of personal therapy needed for the PTSD they will all claim they have. No idea if that will count as secondary costs from the property insurance and re-insurance. If they are expanding in US it is always possible they have bought exposure from a US company that wanted to get out of the market.
It just leaves me still with lots of questions.
I do agree that catastrophes will require more catastrophe insurance in the future, so business will improve, so actually it is all good for business. As long as they aren't bankrupted in the meantime. by traumatised filmstars and them telling everyone on twitter how traumatised they are and how much therapy they need. so everyone else thinks they deserve it too.
best to buy a few weeks after catastrophes (when panic selling is over) and sell before results come out, if one is hedging one's bets?
It trades in a gradually rising channel at the moment, but with lots of ups & downs. So a good one to trade in and out of?

[justiceforthemany] 10/1/2025 08:58

Energy and marine insurance is the mainstay here?

[sigmund freud] 09/1/2025 17:24

Anyone know what the exposure to the fires is?
Mind you, this has been increasing despite seemingly endless bad weather events one does have to wonder what legalese they write into their contracts to avoid paying out.

[j2m] 08/1/2025 12:38

Dip due to LA wildfires??

[j2m] 13/12/2024 17:26

HL, Interactive Investor and Lloyds platforms have paid :)

[furtive_flatulator] 13/12/2024 15:53

Still waiting for mine at Trading212. Anyone else using 212?

Just so I am not going mad here, I bought my shares on the 12th Nov, this should have been
in time for the dividend, right?

[cwa1] 13/12/2024 15:48

Got it in at iDealing

[1knocker] 13/12/2024 15:21

Looking at my account keenly for the dividend to arrive!

[sparki2] 11/12/2024 09:57

Not often is the opportunity for good capital growth combined with excellent dividend income - it is here! Against the risk background management should have an excellent opportunity to further improve margins.

[cwa1] 18/11/2024 08:21

*BARCLAYS RAISES LANCASHIRE PRICE TARGET TO 770 (710) PENCE - 'EQUAL WEIGHT'

[sigmund freud] 16/11/2024 14:50

BME knocker, but don't invest yet. chart is looking horrible, might go down to c300p

[sigmund freud] 16/11/2024 14:43

entirely agree knocker & Louis
catastrophe insurance losses (and just as importantly the premiums for these) are getting much better understood. nice to hear the reality from someone with property in a risk area.
fundamentals good
finances good
returns excellent (I wish I had a chart with all my dividends reinvested on it)
true yield not showing up to the masses due to specials not being accounted for
chart trending up despite the huge payouts
and psychologically a good time to enter just after the XD
anyone with any significant ISA holdings should have this in their portfolio. And keep holding it.

[j2m] 15/11/2024 18:51

Yeah, the way it got through an unprecedented hurricane season etc and still upped its special dividend was impressive. Fully Expect SD again in March.