Lancashire Share Discussion Threads

[medieval blacksmith] 02/3/2022 13:12

I've just bought a tranche.

Maloney is no fool and a very competent CEO IMO. He'll make the adjustments necessary going forward. Still not happy with the continuing share awards though. That should stop.

[salpara111] 02/3/2022 10:20

Breathing a huge sigh of relief that I exited with a large loss at 520 last year rather than waiting for an even larger loss now.
Can they actually price appropriately for risk?
I wonder if anyone would actually be interested in buying them. I would imagine that most shareholders would be happy to get 550p right now.

[essentialinvestor] 14/2/2022 14:22

Exceptional weather events appears to be becoming less exceptional!,

too many excuses here of late.

[km18] 14/2/2022 11:06

Lancashire is specialised in the provision of reinsurance products and global speciality insurance. intermediaries. The Company operates through five segments: Property, Energy, Marine, Aviation and Lloyd's. It underwrites worldwide, insurance and reinsurance contracts that transfer insurance risk, including risks exposed to both natural and man-made catastrophes. The resilient diversified funding structure effectively forced up net revenue from £551.5m to £747.2m. As a result, Lancashire Holdings derived an attractive P/FCF ratio of 7.5, higher than the financial services P/FCF ratio of 5.3, which in turn signifies that Lancashire Holdings allocated its funds more efficiently to finance its operating and investing activities. Subsequently, the firm’s PE ratio stood at 9.3, lower than the financial sector P/E ratio of 15.33, suggesting that Lancashire Holdings is undervalued with respect to the financial sector and thereby the security is expected to surge in value. Consequently, it implies that investors are able to purchase the stock at a discount while still deriving precedented and attractive dividend yield of 6.05%, resulting in ample investment opportunities.



Keep up to date with WealthOracle AM

[topvest] 13/2/2022 20:50

At least both companies have a history of reserve releases, which means a cautious provisioning approach being taken on insurance liabilities. I guess the poor investment return is due to the bond yield moving up with the prospect of sharply higher interest rates. Unfortunately, non-life insurance hasn't been a profitable area over the last few years. Hopefully, 2022 should be much better as the cycle has definitely turned.

[hopan] 11/2/2022 18:22

I am not sure BEZ results are any better if you look at the details. $200mio from reserve release and $100mio from investments... I was expecting better performance from BEZ to be honest. I am surprised with the poor return of investments 0.1% at LRE. Any expert view on their performance for us??

[topvest] 11/2/2022 16:43

Disappointing results, but already factored in I guess. They really need a good year as its been a rough and choppy time to hold these over the last 5 years or so. For what its worth, barring major loss events, I think 2022 should be much better. Beazley results were much more positive thankfully.

[andydaf] 11/2/2022 07:37

Well i was wrong the book was toast!of course next year it moight not be.Thats the insurance game i suppose.GLA

[andydaf] 11/2/2022 05:58

I believe the results will be good however what the market decides may well be a another thing.Fwiw i thought beazleys results were positive and the market marked them down.If these suffer i will most likely have a little top up as over the long term these guys will make money.As always GLA and dyor

[cwa1] 09/2/2022 10:03

Anyone got thoughts on whether results on Friday will make happier reading or not?

[cwa1] 05/1/2022 17:09

5 January 2022

Hamilton, Bermuda

Notice of Q4 2021 Earnings Release and Conference Call

Lancashire Holdings Limited ("Lancashire" or "the Company") will be announcing
its 2021 fourth quarter earnings release at 7:00am UK time on Friday 11
February 2022 and hosting an analyst and investor conference call at 1:00pm UK
time / 8:00am EST on Friday 11 February 2022. The conference call will be
hosted by Lancashire management.

[frishare] 28/10/2021 07:54

Two your two questions the answer is yes. 2021 saw some big catastrophe events which impacted Re-insurers, this hasn’t really been the case in the last few years. We should therefore start to see a better firming in the R/I market from 1/1

[1knocker] 26/10/2021 11:33

That is indeed the crucial question. Before you invest in an insurer, you need to consider two questions (1) what is the tone of the insurance market? Ie are premiums firm/firming? and (2) are the insurer's underwriters good at pricing risk across the book? The insurance market looks reasonably firm at present, and Lancashire's track record is pretty good IMO, but if others have insights to refine or change my views on those two crucial questions, I am all ears.

[buywell3] 25/10/2021 23:18

free stock charts from uk.advfn.com

[hopan] 25/10/2021 23:06

Thanks for the explanation. It is a classic reason for raising capital. Even EZJ raised capital to bank on new expansion, holiday business, etc. but reality might be different.

The question is this insurance company, Lancashire, is one of the competently run insurers? Do they have the ability to price cat risk properly? If run properly and they are competent, the current share price is a right level to entry?

[1knocker] 25/10/2021 18:37

A competently run insurer does not need to raise capital to meet claims. It has reserves calculated to cover claims. Taking premiums and paying out on claims is an insurer's business, just as taking bets and paying out on winners a booky's business. If there were no claims to pay out on, insurance would not be bought, just as there would be no bets if there were no winners to pay to on. What matters is that the insurer correctly prices risk, so that its 'book' is profitable taking one year with another.If Lancashire raise capital, I would expect that to be prompted not by claims, but by improving insurance rates, leading them to wish to write more policies which, if rates are firm, should yield a good return on that capital. That was the rationale for the last capital raise.

[professor john koestler] 25/10/2021 17:42

Loss as in the expected range of the event that has occurred. That isn't the same as saying the loss was expected.

[hopan] 24/10/2021 19:42

Thanks Feddie. Indeed it would be very dilutive at this level, however it would not stop them if they needed the capital. If they say loss is within the expected level, then they would not need extra capital.

[feddie] 24/10/2021 09:41

A capital rise at this highly dilutive level would be very investor unfriendly. In any case, they are saying that the losses are within the expected range.

[hopan] 23/10/2021 18:25

Anyone thinks they might announce capital raise through right issues at the trading update this November after $200mio loss from cats? Is market pricing in such a possibiity? Any thoughts on this subject?

The last capital raise of £287mio was last year June 2020 for about 39.6 million new shares (19.5% of shares) at the price of 726p..

Do your own research before making any decision.

[huncher] 22/10/2021 16:25

Thanks, my knowledge? is second hand via a modeller/stat she is under constant pressure from the U/W to confirm just this almost on a line basis although not LRE specific it seems to be becoming common throughout the market. It is down to U/W management to control their historic "flair" although in days gone by it was the lead U/W's who drove significant profits (. and losses). as you may have gathered "days gone by" applies to Moir.

[wba1] 22/10/2021 16:06

Huncher; with RI it is never the modelling which worries me - that is pretty much actuarial 101 - it is the control to ensure the risks are aligned with the model. Specifically, when a book is being grown quickly, as at present, whether the concentrations of risk, especially geographic, reflect those in the model. It is very easy to allow the salesmen to produce a rather different book to the model and, assuming the top layer is limited, that can result in uncovered exposure (and if this happens the RI premiums will also go through the roof next time around if the reinsurers and brokers think they cannot trust the company). But I have no reason to think this is the case or I would not have bought.

The other point of interest is their RI security list - what are the criteria and who is on it? I assume it is ok given their experience, but I have seen even the big globals incur write offs from RI covering long past years.

But however I look at it I cannot understand the scale of the drop. The statement was clear in referring to net (of RI and associated cost) losses and that those were aligned with assumptions, so I really wonder what analysts think insurance is about.

[huncher] 22/10/2021 14:34

WBA1 - their cat modelling is crucial not only in terms of pricing but the structuring of their own protections (RI) they are very old hands which gives me some confidence.

[sumday] 22/10/2021 13:17

That looks like a significant buy at 13.05.

[feddie] 22/10/2021 13:04

I agree and have added earlier today.