Lancashire Share Discussion Threads

[gsbmba99] 29/8/2017 16:28

Not sure where Equity Development got their number came from.
Not an insurance person, but if the LRE corporate ethos is legit I would be very surprised to hear that they had large flood exposure to Houston. That seems only marginally smarter than offering flood insurance in New Orleans.
EC, Do you have a view as to what would cause a reversal in the decline in rates? Do you see the LRE special dividend for this year as "at risk" as a result of Harvey?

[effortless cool] 29/8/2017 13:35

Flood losses from Harvey are going to be significantly greater than wind losses. They are also going to be a lot more complicated to quantify and settle, due to coverage issues, sublimits and business interruption exposures

Overall, Harvey is certainly not a market changing event, and I would expect the flood aspect to leave losses a lot more concentrated with certain insurers/reinsurers than would be the case for a normal hurricane event.

[gsbmba99] 29/8/2017 12:46

FWIW, I saw the following commentary from Equity Development: "Harvey is the first hurricane to hit the US mainland for a nearly five years and has already caused several $billions in damage. The destruction will result in a short-term hit to companies insuring or reinsuring properties in Texas but the weakening of the winds and their destructive power (indicated by its official downgrading to a “Tropical Storm”) means that it is unlikely to trigger a change in the downward trend in reinsurance and insurance rates." If true, would be a bad outcome for those covering the insured losses (ie losses with no pickup in rates going forward).

[jrphoenixw2] 18/8/2017 08:44

The exchange rate on the div has been published, (a bit after the event as has been typical of late):

'On 26 July 2017 an interim dividend of $0.05 (£0.0386) per common share was declared. The dividends will be paid in Pounds Sterling on 06 September 2017 to shareholders of record on 11 August 2017.'


[ie FX rate 1.2953]

[jrphoenixw2] 01/8/2017 08:14

Ohhhh, I'd never heard of that before! Thank you very much for the explanation, learn something new etc. !

[gsbmba99] 01/8/2017 07:45

You are assuming the additional Invesco shares were all purchased on one day. They reached 16.67% on 12 April 17 and could have been accumulating since then. They only have to report when they cross a whole number. They could have had 16.99% for several months and bought a handful of shares to take them to 17%.

[jrphoenixw2] 31/7/2017 17:25

RNS out this pm -
Invesco upped their stake from 16.67% > 17.00% on Friday 28/7.
Shares in issue 200.4M
Position now +34.1M

Not sure how that didn't cross the public radar since +0.33%*200.4M = about +660k shares. But volume was under half that, 243k on Friday. Curiouser still, well to me, is how despite this purchase we closed tonight lower than Thursday before this purchase. Summer lull, sure, but apparently even a 17% stake can't excite the market... zzz

[gsbmba99] 28/7/2017 14:21

I particularly liked Maloney's response to the question about what would happen if premium contraction continued for several more years and the company was operating with a combined ratio in the 90s. His response was to say that, given LRE believe they have a 15-20% advantage over competitors, it would imply their competitors were operating at a combined ratio approaching 120% which wouldn't be sustainable. They also said they've increased reinsurance purchases for hurricane season versus last year and they are carrying a significant capital buffer. If there is a hurricane that causes significant insured losses, they will be relatively less hurt than others. But, for shareholders, it would likely mean no capital return and possibly a capital raise.

[speedsgh] 28/7/2017 07:22

gsbmba99 - Thanks for your summary. I would have to say that I agree with the CEO wholeheartedly that a serious cat loss is required to reverse the current situation. It's been a while since we've had one. And as often happens, when one does occur, you will probably find another 1 or 2 following in close succession which will really shake things up. As boring as it sounds, LRE's current strategy (focus on profits, not premiums) is spot on imo.

[11_percent] 28/7/2017 07:07

Goes down at the open......

I think it is going to make a high...

We are going to get taken out.

[gsbmba99] 27/7/2017 20:55

Webcast of today's results conference call ( ). Maloney frequently defending the company's strategy to focus on profits and not premiums. Still thinks there needs to be a serious cat loss for the market to reverse. Thinks industry as a whole operating at minimal profitability levels.

[jrphoenixw2] 27/7/2017 08:13

The offer-side must be pretty thin this morning. The 2-minute candle at circa 8.08am saw a spike from c. 744 > 772 on vol of under 30k.

+5.6% in the opening 10 minutes perked up my cornflakes no end, but was sadly short-lived. Glad I'm not looking to trade in size any time soon.

[jrphoenixw2] 27/7/2017 06:48

And finally - the next div:
'Lancashire announces that its Board of Directors has declared an interim dividend for 2017 of $0.05 per common share (approximately (£0.04) per common share at the current exchange rate), which will result in an aggregate payment of approximately $10 million. The dividend will be paid in Pounds Sterling on 6 September 2017 (the "Dividend Payment Date") to shareholders of record on 11 August 2017 (the "Record Date") using the £ / $ spot market exchange rate at 12 Noon London time on the Record Date.'

[jrphoenixw2] 26/7/2017 16:17

You can buy instruments that short whole London listed indices, hence without even considering individual FTSE listed stocks, each of them have shorts.

[11_percent] 26/7/2017 15:50

But it is bad that there any shorting.

[jrphoenixw2] 25/7/2017 12:24

The Standard article quotes Bloomberg data from 'June 2017'.

But looking at per GaryC^ suggests the Standard is incorrect, and there has been no material changes since June either.

[garycook] 25/7/2017 11:24

Speeds,By Shortracker LRE only have 4.51% of shares shorted has of today !

[speedsgh] 25/7/2017 10:09

Wasn't aware that (according to the table in this article) LRE had such a high level of short interest?

[speedsgh] 25/7/2017 10:04

Peel Hunt today reaffirms its add investment rating on Lancashire Holdings Ltd (LON:LRE) and raised its price target to 760p (from 725p).

[garycook] 23/7/2017 11:38

I would think that LRE generate more cash than BEZ,and HSX.Therefore more interest from investors in a possible T/0 target.But pure speculation atm.For me personally I would rather have LRE in my Portfolio,s for great income and growth,and not to be taken over.I recently sold out of BEZ,and would not be interested in owning HSX,because of poor income return.Better options elsewhere.