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Lancashire Holdings Ltd (GB:LRE)
LSE:LRE

Lancashire Holdings (LRE) AI Stock Analysis

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GB

Lancashire Holdings

(LSE:LRE)

78Outperform
Lancashire Holdings shows strong financial performance with robust revenue and cash flow growth. The stock's valuation is attractive, supported by a low P/E ratio and good dividend yield. However, technical indicators suggest caution, and challenges from significant loss events and a competitive environment could impact future performance.

Lancashire Holdings (LRE) vs. S&P 500 (SPY)

Lancashire Holdings Business Overview & Revenue Model

Company DescriptionLancashire Holdings Limited, together with its subsidiaries, provides specialty insurance and reinsurance products in London, Bermuda, and Australia. The company operates through five segments: Property and Casualty Reinsurance, Property and Casualty Insurance, Aviation, Energy, and Marine. It offers property direct and facultative, property political risk and sovereign risk, and property terrorism and political violence insurance products, as well as property reinsurance services; and aviation AV52, aviation consortium, airline hull and liability, and satellite insurance products. The company also provides marine hull, total loss only, mortgagees interests insurance, mortgagees additional perils, excess protection and indemnity, marine war, and builder's risks; and energy insurance products covering upstream, downstream and onshore operational, and upstream construction all risks business. In addition, it offers general insurance, support, insurance agent, and insurance mediation services. The company was incorporated in 2005 and is headquartered in Hamilton, Bermuda.
How the Company Makes MoneyLancashire Holdings makes money primarily through underwriting insurance and reinsurance policies across its specialized sectors. The company's revenue model is centered around collecting premiums from policyholders in exchange for providing coverage against specific risks. Key revenue streams include insurance premiums from sectors such as property, energy, marine, and aviation, where the company leverages its expertise in underwriting complex and high-value risks. Additionally, Lancashire Holdings benefits from its investment portfolio, where it manages assets to generate investment income, thereby enhancing overall profitability. Strategic partnerships with brokers and insurance agents, as well as maintaining a disciplined approach to risk selection and capital management, contribute significantly to its earnings.

Lancashire Holdings Financial Statement Overview

Summary
Lancashire Holdings has demonstrated strong revenue growth and cash flow generation, with robust profitability metrics. The absence of EBIT is a concern, but overall, the balance sheet is stable with controlled leverage and effective cash management.
Income Statement
82
Very Positive
Lancashire Holdings has shown strong revenue growth with a Revenue Growth Rate of 19.5% year-over-year from 2023 to 2024. The Gross Profit Margin remains robust at 100% due to the nature of the insurance industry. However, the absence of EBIT in the latest year could be a concern, though EBITDA Margin holds at 24.8%. Net Profit Margin is solid at 21.5%, indicating profitability improvements.
Balance Sheet
75
Positive
The company's balance sheet shows a solid equity position with an Equity Ratio of 34.1%. The Debt-to-Equity Ratio is stable at 0.31, indicating manageable leverage. ROE stands at 21.5%, demonstrating effective equity utilization. However, the overall asset base has slightly decreased, which could be a point of concern.
Cash Flow
88
Very Positive
Cash flow performance is strong with a Free Cash Flow Growth Rate of 33.2% from 2023 to 2024. The Operating Cash Flow to Net Income Ratio is 1.79, indicating efficient operations generating cash. Free Cash Flow to Net Income Ratio is 1.76, reflecting strong cash conversion capabilities.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
1.50B1.25B1.01B751.10M540.80M
Gross Profit
1.50B1.25B1.01B751.10M540.80M
EBIT
0.00369.80M26.40M-79.10M-11.10M
EBITDA
371.30M364.50M12.40M-42.90M26.20M
Net Income Common Stockholders
321.30M321.50M-3.30M-61.60M4.20M
Balance SheetCash, Cash Equivalents and Short-Term Investments
3.13B2.88B548.80M517.70M432.40M
Total Assets
4.38B3.90B4.75B4.07B3.55B
Total Debt
469.30M471.30M469.40M463.60M348.40M
Net Debt
-215.00M-285.60M-79.40M-54.10M-84.00M
Total Liabilities
2.89B2.39B3.48B2.66B2.01B
Stockholders Equity
1.49B1.51B1.27B1.41B1.54B
Cash FlowFree Cash Flow
566.40M425.30M312.80M239.90M80.90M
Operating Cash Flow
573.80M441.90M323.80M243.80M80.90M
Investing Cash Flow
-251.90M-54.30M-194.90M-186.80M-260.10M
Financing Cash Flow
-386.10M-185.40M-90.80M32.80M287.30M

Lancashire Holdings Technical Analysis

Technical Analysis Sentiment
Positive
Last Price573.00
Price Trends
50DMA
573.88
Positive
100DMA
596.13
Negative
200DMA
590.32
Negative
Market Momentum
MACD
1.48
Negative
RSI
52.35
Neutral
STOCH
69.59
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:LRE, the sentiment is Positive. The current price of 573 is above the 20-day moving average (MA) of 571.00, below the 50-day MA of 573.88, and below the 200-day MA of 590.32, indicating a neutral trend. The MACD of 1.48 indicates Negative momentum. The RSI at 52.35 is Neutral, neither overbought nor oversold. The STOCH value of 69.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:LRE.

Lancashire Holdings Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
GBADM
83
Outperform
£10.19B15.0556.17%3.69%34.86%95.18%
GBBEZ
79
Outperform
£5.61B6.4726.32%2.84%7.79%9.99%
GBLRE
78
Outperform
£1.43B5.4921.23%3.08%14.46%-2.98%
64
Neutral
$12.57B9.747.88%16985.68%12.42%-5.45%
GBDLG
63
Neutral
£3.76B25.475.97%2.40%26.11%-29.43%
56
Neutral
£2.71B70.933.77%8.04%-15.48%-91.10%
54
Neutral
£1.25B-2.09%6.10%6.08%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:LRE
Lancashire Holdings
573.00
15.74
2.82%
GB:ADM
Admiral
3,350.00
666.62
24.84%
GB:BEZ
Beazley
888.00
234.22
35.83%
GB:BRBY
Burberry
768.80
-354.03
-31.53%
GB:DLG
Direct Line Insurance
291.20
98.28
50.94%
GB:HMSO
Hammerson plc R.E.I.T.
255.00
-15.54
-5.74%

Lancashire Holdings Earnings Call Summary

Earnings Call Date:Mar 06, 2025
(Q4-2024)
|
% Change Since: -4.63%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
The earnings call presents a mixed outlook. While Lancashire achieved strong financial performance in 2024 with record ROE and premium growth, the impact of significant loss events like the California wildfires and anticipated rate softening pose challenges for 2025. The company's ability to return capital to shareholders and expand geographically highlights resilience, but the loss environment and competitive pressures weigh on future prospects.
Q4-2024 Updates
Positive Updates
Record Return on Equity (ROE)
Lancashire delivered an impressive ROE of 23.4% for 2024, showcasing the effectiveness of their growth and diversification strategy.
Premium Growth
The company achieved an 11% growth in premiums for 2024, exceeding their guidance of 10%, and has more than tripled premiums since 2017.
Strong Underwriting Performance
Lancashire's combined ratio was 80% on a discounted basis and 89.1% on an undiscounted basis, reflecting strong underwriting results despite significant weather and large risk losses.
Capital Returns to Shareholders
Lancashire returned $354 million to shareholders in 2024 and declared a special dividend of $0.25 per share.
Investment Returns
The investment portfolio generated a return of 5%, driven by high yields and strong performance of risk assets.
Geographic Expansion
Lancashire successfully launched a U.S. platform, contributing to year-on-year growth and positioning for future expansion.
Negative Updates
Impact of California Wildfires
The wildfires in Los Angeles are expected to result in a net loss of $145 million to $165 million, significantly affecting the financial outlook for 2025.
High Catastrophe Losses
Natural catastrophe losses were approximately $145 billion in 2024, contributing to a challenging loss environment.
Rate Softening Expected
For 2025, Lancashire anticipates the first year since 2017 to see marginal rate softening, indicating a more competitive environment.
Baltimore Bridge Disaster
The Baltimore bridge loss was a significant large risk event impacting the insurance service result for 2024.
Company Guidance
During the Lancashire Full Year 2024 Earnings Conference Call, key guidance metrics were highlighted. The company reported a strong return on equity (ROE) of 23.4% for 2024, despite facing significant industry losses, and projected an ROE in the mid-teens for 2025, considering similar loss levels as in 2024 plus an estimated $145 million to $165 million impact from the California wildfires. Premiums grew by 11.3%, surpassing their guidance of approximately 10%, and the combined ratio was 80% on a discounted basis and 89.1% on an undiscounted basis. The investment portfolio generated a return of 5%, while the diluted book value per share increased by 23.4%. The company returned $354 million to shareholders through dividends and retained a healthy balance sheet with a solvency ratio of around 250% after accounting for the California wildfire loss. Looking ahead, Lancashire anticipates low single-digit growth in gross written premiums for 2025, with a focus on specialty reinsurance lines and the U.S. platform, while maintaining underwriting discipline amidst a dynamic external environment.

Lancashire Holdings Corporate Events

Other
Lancashire Holdings Director Increases Shareholding
Positive
May 6, 2025

Lancashire Holdings Limited announced that Philip Broadley, the Non-Executive Director and Chair of the Board of Directors, purchased 1,800 common shares of the company at a price of £5.82754 per share. This transaction increases Broadley’s total interest in the company to 53,415 shares, representing 0.0219% of the total voting rights. This move reflects a potential vote of confidence in the company’s future performance and may influence stakeholder perceptions positively.

Spark’s Take on GB:LRE Stock

According to Spark, TipRanks’ AI Analyst, GB:LRE is a Outperform.

Lancashire Holdings receives a strong overall score due to its impressive financial performance with robust revenue and cash flow growth. The stock’s valuation is highly attractive, appealing to both value and income investors. However, technical indicators suggest caution due to neutral to slightly bearish trends. The earnings call and corporate events highlight strong past performance but also point to potential challenges from significant loss events and a competitive environment.

To see Spark’s full report on GB:LRE stock, click here.

Executive/Board Changes
Lancashire Holdings Announces Key Board Appointments
Neutral
May 1, 2025

Lancashire Holdings Limited has announced the appointment of Irene McDermott Brown as the new Senior Independent Director, effective from 30 April 2025, succeeding Robert Lusardi. Additionally, Bryan Joseph has been appointed to the Nomination Corporate Governance and Sustainability Committee, while Robert Lusardi and Michael Dawson have stepped down as Non-Executive Directors following the company’s 2025 Annual General Meeting. These changes are part of the company’s ongoing efforts to strengthen its governance structure.

Spark’s Take on GB:LRE Stock

According to Spark, TipRanks’ AI Analyst, GB:LRE is a Outperform.

Lancashire Holdings scores well due to its strong financial performance, especially in revenue growth and cash flow generation. The stock’s valuation is highly attractive with a low P/E ratio and a decent dividend yield, making it appealing to value and income investors. However, the technical indicators suggest a cautious approach due to neutral to slightly bearish trends. The earnings call highlights robust past performance but also underlines potential challenges from significant loss events and competitive pressures in the future.

To see Spark’s full report on GB:LRE stock, click here.

Shareholder Meetings
Lancashire Holdings Announces Successful AGM Resolutions
Positive
May 1, 2025

Lancashire Holdings Limited announced the successful passing of all twenty resolutions at its Annual General Meeting held on April 30, 2025. The resolutions, which were approved by shareholders, will be submitted to the National Storage Mechanism for public inspection. This outcome reflects strong shareholder support and may positively influence the company’s market position and stakeholder confidence.

Spark’s Take on GB:LRE Stock

According to Spark, TipRanks’ AI Analyst, GB:LRE is a Outperform.

Lancashire Holdings scores well due to its strong financial performance, especially in revenue growth and cash flow generation. The stock’s valuation is highly attractive with a low P/E ratio and a decent dividend yield, making it appealing to value and income investors. However, the technical indicators suggest a cautious approach due to neutral to slightly bearish trends. The earnings call highlights robust past performance but also underlines potential challenges from significant loss events and competitive pressures in the future.

To see Spark’s full report on GB:LRE stock, click here.

Business Operations and StrategyFinancial Disclosures
Lancashire Holdings Reports Strong Q1 2025 Performance Amid Market Challenges
Positive
May 1, 2025

Lancashire Holdings Limited reported a 12.7% increase in gross premiums written, amounting to $712.1 million for the first quarter of 2025. The company maintained a strong regulatory ECR ratio of 271% and achieved a total investment return of 1.9%. Despite the financial impact of the California wildfires, estimated between $145 million and $165 million, the company demonstrated resilience with a focus on underwriting opportunities and maintaining a conservative investment portfolio. The company’s strategy and strong capital position underscore its ability to deliver consistent returns in a challenging market environment.

Spark’s Take on GB:LRE Stock

According to Spark, TipRanks’ AI Analyst, GB:LRE is a Outperform.

Lancashire Holdings scores well due to its strong financial performance, especially in revenue growth and cash flow generation. The stock’s valuation is highly attractive with a low P/E ratio and a decent dividend yield, making it appealing to value and income investors. However, the technical indicators suggest a cautious approach due to neutral to slightly bearish trends. The earnings call highlights robust past performance but also underlines potential challenges from significant loss events and competitive pressures in the future.

To see Spark’s full report on GB:LRE stock, click here.

Shareholder MeetingsFinancial DisclosuresRegulatory Filings and Compliance
Lancashire Holdings Announces 2025 AGM and Publishes 2024 Annual Report
Neutral
Mar 28, 2025

Lancashire Holdings Limited has announced its 2025 Annual General Meeting (AGM) scheduled for April 30, 2025, at its head office in Bermuda. Shareholders can attend in person or via a dedicated telephone conference line, with voting rights determined by the register of members as of April 23, 2025. The company has also published its 2024 Annual Report, which is available on its website and through the National Storage Mechanism. This announcement is part of Lancashire’s regulatory obligations and may contain price-sensitive information.

Executive/Board ChangesBusiness Operations and Strategy
Lancashire Holdings Grants Executive Share Awards
Neutral
Mar 17, 2025

Lancashire Holdings Limited has announced the granting of Restricted Share Awards (RSS awards) as nil-cost options over common shares to its top executives. These awards are part of the company’s Long Term Incentive Performance and Deferred Annual Bonus plans, aimed at incentivizing key management figures such as Alex Maloney, Natalie Kershaw, and Paul Gregory. The awards are structured to vest over a period of time, contingent on performance conditions and continued employment, reflecting the company’s strategy to align executive interests with long-term shareholder value.

Executive/Board ChangesBusiness Operations and Strategy
Lancashire Holdings Announces Strategic Board Committee Appointments
Neutral
Mar 6, 2025

Lancashire Holdings Limited has announced several key appointments to its board committees, effective from March 5, 2025. Nathalie Rachou, Linda Ventresca, Bob Cox, and Matthew Narbett have been appointed to various committees, with Rachou expected to become Chair of the Investment Committee following the company’s Annual General Meeting in April. These appointments are likely to impact the company’s strategic direction and governance, potentially influencing its market positioning and stakeholder relations.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.