Lancashire Holdings (LRE) AI Stock Analysis

• Market Cap: £1.50B
• Dividend Yield: 11.03%
• Average Volume (3M): 740.00K
• Price to Earnings (P/E): 7.0
• Beta (1Y): 1.22
• Revenue Growth: 8.78%
• EPS Growth: -38.83%
• Country: UK
• Employees: 426
• Sector: Financial
• Sector Strength: 70
• Industry: Insurance - Specialty
• EPS (TTM): 0.57
• Shares Outstanding: 244,010,010
• 10 Day Avg. Volume: 593,521
• 30 Day Avg. Volume: 740,005
• PEG Ratio: -0.94
• Price to Book (P/B): 1.39
• Price to Sales (P/S): 0.98
• P/FCF Ratio: 4.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £652.00
• Price Target Upside: 3.99% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): 1.2
• Revenue Forecast (FY): £2.08B

• Rating: 74 Outperform
• Price Target: 670.00 p ▲(6.86% Upside)
• Action: Reiterated Date: 03/07/26
• Date: Action: Reiterated 03/07/26

The score is driven by solid financial recovery and balance sheet discipline, plus attractive valuation (low P/E and high dividend yield). These positives are tempered by weak near-term technical momentum and continued underwriting volatility risks highlighted on the earnings call (cat losses, higher expenses, and a more competitive market).

Positive Factors

Strong capital (BSCR ~257%)

A BSCR of ~257% gives Lancashire durable solvency headroom to write selective business, absorb large catastrophe shocks, and fund buybacks/dividends. This capital strength supports disciplined underwriting and strategic growth without immediate recapitalization risk, aiding multi-quarter resilience.

Revenue and earnings recovery

Meaningful top-line scaling and recovery from 2021–22 losses indicate restored underwriting capacity and market share gains. Consistent positive earnings 2023–2025 show stronger cash conversion and a more stable earnings base that supports underwriting flexibility and longer-term strategic plans.

Disciplined specialty growth & Lloyd's capacity

Targeted expansion into specialty lines and extra Lloyd's capacity reflects deliberate, portfolio-focused growth. This enhances distribution, diversifies risk across classes (marine, energy, U.S. liability) and leverages underwriting expertise, improving structural revenue diversity over multiple quarters.

Negative Factors

Catastrophe loss volatility

Material catastrophe hits materially erode underwriting results and capital, creating persistent earnings volatility. Large weather events can force higher reinsurance purchasing or pricing concessions, reducing underwriting margins and complicating multi-quarter return predictability for this short-tail specialist.

Margin compression

Declining margins signal a tougher pricing or claims mix environment that can persist across the underwriting cycle. Sustained margin compression reduces ROE potential and limits the firm's ability to expand profitably, making future capital returns and growth contingent on improved pricing or lower catastrophe frequency.

Rising operating expenses

Higher operating costs, including increased headcount, create a structural drag on underwriting margins and ROE. If expense growth outpaces revenue or efficiency gains, the company must either improve pricing discipline or deliver higher investment income to sustain long-term profitability and capital return targets.

Lancashire Holdings Business Overview & Revenue Model

Company Description

Lancashire 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 Money

Lancashire Holdings generates revenue primarily through the underwriting of insurance and reinsurance policies. The company earns premiums from clients seeking coverage in its core sectors, which include property, marine, and aviation insurance. Additionally, Lancashire may receive investment income from its asset portfolio, which is managed to support its underwriting activities. Key revenue streams include premium income from written policies and reinsurance contracts. The company's financial performance is influenced by its ability to accurately assess and price risk, as well as its investment strategies. Significant partnerships with brokers and other insurance entities help to expand its market reach and client base, thus contributing to its overall earnings.

Lancashire Holdings Financial Statement Overview

Summary

Strong scale and earnings recovery after 2021–2022 losses, with solid cash conversion and controlled leverage. Offsetting this, 2025 shows margin compression and operating cash flow declined versus 2024, highlighting cyclical underwriting sensitivity.

Income Statement

Revenue has scaled meaningfully, rising from ~0.54bn (2020) to ~2.13bn (2025), with a very strong jump in 2025. Profitability has also improved versus the loss-making 2021–2022 period, with solid positive earnings in 2023–2025. That said, margins have compressed since 2023 (net margin down from ~23% in 2023 to ~14% in 2025), indicating less favorable underwriting/income conditions or a tougher pricing environment despite higher revenue.

Balance Sheet

Leverage looks controlled and stable, with debt-to-equity consistently around ~0.31–0.35 in recent years and equity broadly steady to modestly higher by 2025. Total assets have expanded, supporting growth. The main weakness is that profitability on equity has been volatile across the cycle (negative in 2021–2022 before recovering strongly in 2023–2024), which highlights earnings sensitivity typical for specialty insurance.

Cash Flow

Cash generation is generally strong: free cash flow tracks net income closely across years (roughly ~0.96–1.00x), and absolute operating/free cash flow remains healthy in 2023–2025. However, operating cash flow declined in 2025 versus 2024 even as revenue increased, and the provided operating cash flow coverage metric is inconsistent (shown as 0.0 in 2024–2025), which reduces confidence in coverage trend interpretation.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.53B	2.13B	1.70B	1.40B	783.90M	747.70M
Gross Profit	1.53B	2.13B	1.22B	1.01B	522.70M	590.70M
EBITDA	0.00	356.32M	371.30M	364.50M	12.40M	-26.60M
Net Income	229.70M	299.56M	321.30M	321.50M	-15.50M	-62.20M
Balance Sheet
Total Assets	4.55B	4.81B	4.38B	3.90B	4.75B	4.07B
Cash, Cash Equivalents and Short-Term Investments	653.20M	561.60M	3.13B	2.88B	2.38B	517.70M
Total Debt	468.90M	477.37M	469.30M	471.30M	469.40M	463.60M
Total Liabilities	3.04B	3.30B	2.89B	2.39B	3.48B	2.66B
Stockholders Equity	1.51B	1.51B	1.49B	1.51B	1.33B	1.41B
Cash Flow
Free Cash Flow	411.20M	465.16M	566.40M	425.30M	312.80M	239.90M
Operating Cash Flow	412.50M	467.51M	573.80M	441.90M	323.80M	243.80M
Investing Cash Flow	-148.20M	-301.19M	-251.90M	-54.30M	-194.90M	-186.80M
Financing Cash Flow	-330.40M	-314.05M	-386.10M	-185.40M	-90.80M	32.80M

Lancashire Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 627.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:LRE, the sentiment is Negative. The current price of 627 is below the 20-day moving average (MA) of 634.10, below the 50-day MA of 629.16, and above the 200-day MA of 588.82, indicating a neutral trend. The MACD of -8.12 indicates Positive momentum. The RSI at 44.42 is Neutral, neither overbought nor oversold. The STOCH value of 52.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:LRE.

Lancashire Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SBRE	75 Outperform	£400.63M	8.52	11.29%	4.89%	7.77%	35.65%
LRE	74 Outperform	£1.50B	6.98	15.28%	11.03%	8.78%	-38.83%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
SAGA	65 Neutral	£713.73M	-18.58	-106.78%	―	-35.05%	74.73%
HUW	58 Neutral	£136.97M	9.54	10.08%	2.90%	―	―

Lancashire Holdings Corporate Events

Lancashire Sets 5 March Date for Q4 2025 Results and Investor Call

Lancashire Holdings will publish its fourth-quarter 2025 results at 07:00 GMT on 5 March 2026 and will host an analyst and investor conference call the same day at 13:00 GMT / 08:00 EST, led by senior management. Investors and analysts must register in advance to access the audio call or webcast, with a replay available for 12 months, underscoring the group’s efforts to maintain transparent communication with the market on what it flags as potentially price-sensitive financial information under UK Market Abuse Regulation.

The most recent analyst rating on (GB:LRE) stock is a Buy with a £649.00 price target. To see the full list of analyst forecasts on Lancashire Holdings stock, see the GB:LRE Stock Forecast page.

S&P upgrades Lancashire Holdings’ credit ratings on stronger diversification and earnings

Lancashire Holdings has received an upgrade from S&P Global Ratings, which raised the long-term issuer credit and financial strength ratings of its core (re)insurance operating subsidiaries to ‘A’ from ‘A-’, and the long-term issuer credit rating on the holding company to ‘BBB+’ from ‘BBB’, with a stable outlook. S&P cited Lancashire’s broader product offerings, expanded geographic footprint and increased presence in less-volatile lines as factors improving portfolio resilience and earnings quality, and said the higher ratings reflect confidence in the group’s ability to sustain stronger operating earnings while executing its diversification strategy and maintaining robust enterprise risk management as it grows into new business lines and regions.

The most recent analyst rating on (GB:LRE) stock is a Buy with a £649.00 price target. To see the full list of analyst forecasts on Lancashire Holdings stock, see the GB:LRE Stock Forecast page.

Lancashire Holdings Chair Increases Shareholding

Lancashire Holdings Limited announced that Philip Broadley, the Non-Executive Director and Chair of the Board of Directors, has purchased 5,580 common shares of the company at £5.94 per share. This transaction increases Broadley’s total shareholding to 63,695 common shares, representing 0.0261% of the company’s Total Voting Rights. The acquisition of shares by a key board member may signal confidence in the company’s future prospects and could positively influence stakeholder perceptions.

The most recent analyst rating on (GB:LRE) stock is a Buy with a £649.00 price target. To see the full list of analyst forecasts on Lancashire Holdings stock, see the GB:LRE Stock Forecast page.