Lancashire Share Discussion Threads

[speedsgh] 02/11/2017 11:24

Despite the lack of special dividend this time round, I took today's update as generally positive for the longer term. Hopefully the losses incurred in LRE's peer group over the quarter will help to sort some of the wheat out from the chaff.

[pimsim] 02/11/2017 08:03

2 takeaways from this.....

In the past, Special divis have been as much about the lack of opportunities to deploy surplus cash as they have about returns on capital. If the industry really is turning to higher premiums then LRE will want to deploy as much capital as possible and it is likely that special divis will not match the levels seen in the past (although normal divi should continue to grow at a faster pace).

Like every other industry sector, the insurance market has been heavily influenced by the surplus liquidity created by QE and investor's constant search for yield. New money coming into the market has been a major constraint on premiums for some time. Some of those new players may have burnt fingers at the moment but it will interesting to see if higher premiums can be sustained or whether the yield pulls in yet more surplus cash in a world still short of investment opportunities.

[jrphoenixw2] 02/11/2017 07:09

Whelan/CFO

"The third quarter of 2017 witnessed an extraordinary level of loss activity. With the occurrence of hurricanes Harvey, Irma and Maria and the Mexican earthquakes, the industry has incurred substantial losses. We have recorded a net loss across our three platforms from these events of $165.0 million, after recoveries and the impact of inwards and outwards reinstatement premiums. Our RoE is negative 10.4% and our combined ratio is 213.3% for the third quarter of 2017. Our RoE for the year to date is negative 5.1%. While we have incurred a loss in the quarter and for the year to date, we anticipate an improvement in rates following these events. Our outlook for 2018 is more positive than it has been for some time. We therefore do not intend to declare a special dividend this year; we expect to put all of our capital to work to take advantage of improving market conditions. However, we will continue to pay our standard ordinary dividend, in line with our stated dividend policy."

Direct link to results on the LRE site:

[jrphoenixw2] 02/11/2017 07:07

No Special div.

Mahoney:
'In previous years, following uneventful wind seasons, Lancashire has returned surplus capital to its shareholders by way of a special dividend. That is not the case this year. I am confident that the likely change in underwriting conditions affords us an opportunity to deploy the capital which we hold more advantageously, both to service the needs of our clients and their brokers and to continue creating long term value for our shareholders. Lancashire's strategy remains to maximise risk-adjusted returns across the insurance cycle."

[jrphoenixw2] 02/11/2017 06:55

For those waiting for the Q3 figures this morning [due in 5 minutes], some links:

[garycook] 01/11/2017 04:13

jrp,Fair play.Sold out of my SIPP holding in BKG at 3943p,and reduced my holding in my Trading account by a quarter at 3911p.Have 300 left I should have sold them too.Agree with you on the Director ongoing,s.Regarding LRE took a small profit at 753.25p of only 250 shares out of 3,250,leaving me 3,000.Surprised in the LRE performance from the 608p low.Perhaps take over speculation is back.Note BEZ,and HSX,have had a good run also to near 2017 highs with volume also.So something may happen soon.

[johnroger] 31/10/2017 14:39

The share price is not performing as though the company was going to cut or omit its special dividend payment.
Or could it be that a predator is waiting in the wings if the results disappoint?

[garycook] 31/10/2017 14:00

jrp,Keep up the good posting.Results on Thursday ! Any comments on BKG ?

[jrphoenixw2] 31/10/2017 13:57

Someone was buying 'in size' this morning, up to around 740p. Wonder if we'll see any RNSs issued in due course. At this rate might end today on double the daily avg volume...

Or as an alt, Odey is 4.23% short, maybe he doing some covering... we'll see!

[jrphoenixw2] 31/10/2017 08:39

Lively volume this morning. At 8.36am Vol/Avg 217k/449k
So roughly half the daily average volume in the first half hour. +1.24% off the back of that.

Add: 450k/449k at 9.20am Px +14.5p/+2% Nice start to the day!

[jrphoenixw2] 27/10/2017 17:03

+7.14% on the week 'despite Woodford'. It's a funny old market sometimes lol

[speedsgh] 26/10/2017 13:12

GC - I assume you mean c30p for the Special? This equates to c40 US cents. Well below recent years but perhaps unsurprising in view of the losses sustained from catastrophes in recent months...

special (Dec 16) - USD 0.75/60.4035p
special (Dec 15) - USD 0.95/63.1292p
special (Dec 14) - USD 1.20/76.4112p
special (Dec 13) - USD 0.45/27.54p
special (Dec 12) - USD 0.90/56.05p
special (Dec 11) - USD 0.80/51.65p
special (Jan 11) - USD 1.40/88.56p

[jrphoenixw2] 26/10/2017 13:04

The price action is interesting, Woodford chops his holding in half despite which it rallies nicely. [No idea re: the div, seem to be getting mixed signals].

This is the other figure I'll be watching, from their statement of 9-Oct: 'The aggregate estimated net ultimate losses for these events is expected to be in a range of $106 million to $212 million after anticipated recoveries from its outwards reinsurance programme and the impact of outwards and inwards reinstatement premiums.'

[garycook] 26/10/2017 11:24

Rumour of around a 30p Final.But do not quote me on that !

[billy5] 26/10/2017 11:05

Anybody heard any rumours regarding the divi this year. Do we anticipate a substantial cut or is it a non starter. Judging by the share price trading it would seem that there is plenty of optimism.

[jrphoenixw2] 26/10/2017 10:18

Nudging a 2-month high intra-day @ 698

[jrphoenixw2] 25/10/2017 17:32

Closing vol = 857,803 vs daily average of 428,608 = 200.14%
I'm going to be keeping an eye out for any RNSs tom/Friday...

p.s./add - just noticed an RNS from this pm.
Woodford has cut again from 7.68% to 4.57%
Traded 24th, notified today.
-3.11%*shares in issue of 200.427MM = -6.23MM

[jrphoenixw2] 25/10/2017 11:36

+2% on solid volume, 521k at the half-way point today vs 428k 30-day full daily average.
Coming up, Q3 results next Wednesday.

[jrphoenixw2] 25/10/2017 08:42

Apols, my mistake.

[effortless cool] 25/10/2017 08:24

It is still 30%.

[cwa1] 25/10/2017 08:04

Apparition1, must confess I hadn't heard it had dropped from 30% to 20% either, so would also welcome some clarification on that one.

Meanwhile this morning's news is that Bar Cap have upgraded:-

25 Oct 17 Barclays Capital Equal weight 691.75 - 687.00 Upgrades

.....was 631p target previously, so a decent upgrade in terms of target price at least.

[apparition1] 24/10/2017 16:27

When was the threshold reduced from 30% to 20% - I missed that one.