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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)

Rating:75Outperform
Price Target:
647.00p
▲(12.13%Upside)
Lancashire Holdings' overall stock score is driven by robust financial performance and attractive valuation. However, technical analysis signals caution, and future challenges highlighted in the earnings call moderate the score. Positive corporate events provide additional support.

Lancashire Holdings (LRE) vs. iShares MSCI United Kingdom ETF (EWC)

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 through the underwriting of specialty insurance and reinsurance contracts, generating revenue from premiums paid by its clients. The company focuses on niche markets where it can leverage its expertise to assess and price complex risks, often involving high-value assets or unique exposures. Key revenue streams include property insurance for natural catastrophes, energy sector coverage for oil and gas operations, and marine and aviation insurance for shipping and aircraft risks. Additionally, the company invests its premium income in a diversified portfolio of financial instruments, which provides investment income. Significant partnerships with brokers and distribution networks help Lancashire to access a broad range of clients and maintain a competitive edge in the market.

Lancashire Holdings Earnings Call Summary

Earnings Call Date:Mar 06, 2025
(Q4-2024)
|
% Change Since: -2.18%|
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 Financial Statement Overview

Summary
Lancashire Holdings exhibits a robust financial position with strong revenue growth and cash flow generation. Profitability metrics are solid, with a net profit margin of 21.5%, although the lack of EBIT in the latest year could raise concerns. The balance sheet remains stable with controlled leverage, and cash flow metrics indicate 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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.20B1.50B1.25B1.01B751.10M540.80M
Gross Profit1.20B1.50B1.25B1.01B751.10M540.80M
EBITDA-37.10M371.30M364.50M12.40M-42.90M26.20M
Net Income321.50M321.30M321.50M-3.30M-61.60M4.20M
Balance Sheet
Total Assets3.90B4.38B3.90B4.75B4.07B3.55B
Cash, Cash Equivalents and Short-Term Investments2.88B3.13B2.88B548.80M517.70M432.40M
Total Debt471.30M469.30M471.30M469.40M463.60M348.40M
Total Liabilities2.39B2.89B2.39B3.48B2.66B2.01B
Stockholders Equity1.51B1.49B1.51B1.27B1.41B1.54B
Cash Flow
Free Cash Flow432.30M566.40M425.30M312.80M239.90M80.90M
Operating Cash Flow441.90M573.80M441.90M323.80M243.80M80.90M
Investing Cash Flow-54.30M-251.90M-54.30M-194.90M-186.80M-260.10M
Financing Cash Flow-185.40M-386.10M-185.40M-90.80M32.80M287.30M

Lancashire Holdings Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price577.00
Price Trends
50DMA
580.15
Negative
100DMA
574.23
Positive
200DMA
584.87
Negative
Market Momentum
MACD
-4.46
Positive
RSI
48.72
Neutral
STOCH
41.49
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:LRE, the sentiment is Neutral. The current price of 577 is below the 20-day moving average (MA) of 581.45, below the 50-day MA of 580.15, and below the 200-day MA of 584.87, indicating a bearish trend. The MACD of -4.46 indicates Positive momentum. The RSI at 48.72 is Neutral, neither overbought nor oversold. The STOCH value of 41.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GB:LRE.

Lancashire Holdings Peers Comparison

Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
GBCRE
83
Outperform
£614.98M6.2912.25%7.08%27.08%-34.38%
GBLRE
75
Outperform
£1.38B5.4121.23%4.71%14.46%-2.98%
67
Neutral
$16.51B11.239.71%3.96%11.61%-10.70%
GBHUW
£159.18M8.7213.74%2.00%
70
Outperform
£249.43M-127.10%-20.62%-44.96%
65
Neutral
£359.50M9.9314.37%4.75%32.88%99.17%
61
Neutral
£236.13M-23.29%9.29%1.10%-1831.40%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:LRE
Lancashire Holdings
581.00
54.50
10.35%
GB:HUW
Helios Underwriting
223.00
58.59
35.64%
GB:VANQ
Vanquis Banking Group
98.40
48.30
96.41%
GB:SAGA
Saga plc
176.40
66.20
60.07%
GB:SBRE
Sabre Insurance Group plc
143.80
6.81
4.97%
GB:CRE
Conduit Holdings Ltd
388.00
-74.87
-16.18%

Lancashire Holdings Corporate Events

Financial Disclosures
Lancashire Holdings to Announce 2025 Half-Year Results
Neutral
Jun 25, 2025

Lancashire Holdings Limited announced it will release its 2025 half-year results on August 6, 2025, followed by an analyst and investor conference call. This announcement is significant as it provides stakeholders with insights into the company’s financial performance and strategic positioning in the specialty insurance and reinsurance market.

The most recent analyst rating on (GB:LRE) stock is a Buy with a £7.09 price target. To see the full list of analyst forecasts on Lancashire Holdings stock, see the GB:LRE Stock Forecast page.

Business Operations and StrategyRegulatory Filings and Compliance
BlackRock Adjusts Stake in Lancashire Holdings
Neutral
Jun 25, 2025

Lancashire Holdings Limited, a non-UK issuer, has been involved in a significant change in its voting rights structure due to an acquisition or disposal by BlackRock, Inc., a major asset management firm based in the USA. As of June 20, 2025, BlackRock’s total voting rights in Lancashire Holdings have slightly decreased to 4.96%, down from a previous position of 5.00%. This change reflects a minor adjustment in BlackRock’s investment strategy, which could have implications for its influence over the company’s decisions.

The most recent analyst rating on (GB:LRE) stock is a Buy with a £7.09 price target. To see the full list of analyst forecasts on Lancashire Holdings stock, see the GB:LRE Stock Forecast page.

Regulatory Filings and Compliance
Lancashire Holdings Director Increases Shareholding
Positive
Jun 18, 2025

Lancashire Holdings Limited, a company operating in the insurance sector, announced a transaction involving Sally Williams, a Non-Executive Director and Chair of the Audit Committee. On June 17, 2025, Williams purchased 868 common shares of the company, increasing her total shareholding to 11,950 shares, which represents 0.0049% of the company’s total voting rights. This transaction, disclosed in accordance with UK MAR requirements, reflects a personal investment by a key figure in the company’s governance, potentially signaling confidence in the company’s future prospects.

The most recent analyst rating on (GB:LRE) stock is a Buy with a £7.09 price target. To see the full list of analyst forecasts on Lancashire Holdings stock, see the GB:LRE Stock Forecast page.

Business Operations and StrategyRegulatory Filings and Compliance
BlackRock Increases Stake in Lancashire Holdings to 5%
Neutral
May 30, 2025

Lancashire Holdings Limited, a non-UK issuer, has seen a change in its voting rights structure due to an acquisition or disposal by BlackRock, Inc., a major shareholder based in Wilmington, USA. This notification indicates that BlackRock’s total voting rights in Lancashire Holdings have increased to 5.00%, up from a previous position of 4.36%. This change in voting rights could potentially impact Lancashire Holdings’ governance and decision-making processes, as BlackRock holds a significant influence over the company’s strategic direction.

The most recent analyst rating on (GB:LRE) stock is a Buy with a £7.09 price target. To see the full list of analyst forecasts on Lancashire Holdings stock, see the GB:LRE Stock Forecast page.

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.

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.

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.

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.

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jun 19, 2025