Navy recruits helping clear the aftermath of a hurricane in the US
(Picture: AFP via Getty Images)2021 was one of the costliest years on record for the insurance industry, according to speciality insurer Lancashire Holdings.
The FTSE-250 firm, which operates mainly in the property, marine, aviation and energy areas, lost $92.9 million last year, compared to a $24.3 million profit in the previous year.
It was only the second annual loss suffered by the company since it was founded in 2005.
Chief executive Alex Maloney said: “With Winter Storm Uri, hurricane Ida, European storms and floods, and Midwest US tornadoes, among others, industry-wide estimates place insured losses from natural catastrophes between $105 billion and $130 billion.”
Swiss Re said in December that the insurance industry lost an estimated $112 billion due to claims from natural disasters and extreme weather last year. That was the fourth highest annual total since 1970. Hurricane Ida alone accounted for an estimated $30 billion of losses.
Lancashire said gross premiums written last year increased by 50% to a record $1.2 billion as demand for insurance grew in line with claims.
“Much of this premium will continue to earn through in 2022 and is expected to provide earnings resilience in future years,” said Maloney.
The company announced a final dividend of $0.10 per share despite the loss to bring the full year dividend up to $0.15.
Lancashire’s shares hit a height of 848p in June 2020 but have been hit by a wave of global disasters to slide to around 538p in today’s trading.
“We are seeing strong evidence that Lancashire’s underlying margins are materially improving in 2021 and we see further momentum in 2022,” said analysts at Peel Hunt.
