Wednesday 10 February 2021 10:57 am

Lancashire offset Covid losses with strong investment portfolio

City-based insurer Lancashire left 2020 “relatively unscathed” as its investment portfolio offset nearly $150m in losses linked to the pandemic and natural catastrophes, the company announced this morning.

The Group credits the positive fiscal year to its investment portfolio, which ranges from political risk to AV52 markets.

Gross premiums written increased by 15.2 per cent year on year, driving the total to over $1b from $938.8m in 2019, thanks to the company’s aviation, energy and marine sectors that grew steadily or “evolved” with the uncertainty.

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Strategy

The Group’s chief executive officer Alex Maloney said: “This last year has demonstrated the value of our strategic planning in preparing for challenges and opportunities, both expected and unexpected.

“Our conservative investment philosophy has again served us well for the year, and after initial volatility in the first quarter, it was pleasing to see the investment portfolio recover and ultimately contribute to our profitability for the full year.”

The company enjoyed a renewal price index (RPI) of 112 per cent, alongside a combined ratio of 107.8 per cent which included the impacts of Covid-19 on the business.

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Maloney attributed the strong RPI for year to a “strengthening” in market pricing, suggesting a steadier financial year in the insurance landscape for 2021.

The City-based firm finished the year with a complete investment return, including unrealised gains and losses of 3.9 per cent.

Chief financial officer Natalie Kershaw said: “We are pleased to have navigated 2020 relatively unscathed given the number of catastrophe and risk losses incurred in addition to the financial impacts of COVID-19.

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“In such a difficult year we consider making an overall profit after tax of $4.2m and comprehensive income of $24.3m a very positive result. Our investment portfolio contributed significantly to our profitability, generating returns of 3.9 per cent for the year.”

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