Lancashire Holdings Limited (LSE:LRE) on Wednesday boosted its full-year return on equity (ROE) guidance after reporting first-half earnings that surpassed market forecasts by 24%.
The insurer lifted its 2025 ROE projection from the mid-teen range to the high teens, based on the assumption that the second half will see loss conditions similar to those in 2024, when it faced total major losses of approximately $169 million.
Profit before tax exceeded expectations by 27%, while profit after tax outpaced consensus by 24%.
Lancashire’s robust results were mainly attributed to stronger underwriting margins and, to a lesser degree, enhanced investment returns.
The undiscounted combined operating ratio came in 1.3 percentage points better than anticipated, and net investment returns were 8% above market estimates.
Despite the encouraging earnings, gross premiums written lagged consensus by 2.2%, and insurance revenue fell 0.6% short of expectations. However, the insurance service result exceeded consensus by 39%.
Diluted book value per share was 2% higher than expected, while the interim dividend per share remained steady at 7.5 cents.
The upgrade in guidance ahead of the peak U.S. windstorm season signals confidence in Lancashire’s underwriting discipline, which may bolster shares that have seen weakness earlier this year.
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