Friday, December 21, 2018

Better Pricing Bodes Well For Lancashire Holdings After A Tough Year

It’s been a challenging year for specialty insurer Lancashire Holdings (OTCPK:LCSHF) (LRE.L), as pricing has been slower to recover in reinsurance and losses from both natural disasters and “regular business” have taken a bite. Not only has Lancashire trailed other more traditional specialty insurers/reinsurers like Everest Re (RE), other Lloyds players like Beazley (OTC:BEAZY) and Hiscox (OTC:HCXLY) have also done better over the past year, though Lancashire has been outperforming more recently and does pay out a sizable percentage of its earnings as a dividend (having recently announced another large special dividend).

Lancashire will always be a challenging company to model, as management doesn’t prioritize or target growth like other insurers, and instead focuses on writing low-frequency/high-severity policies and returning a large percentage of its surplus capital to shareholders. While modeling a volatile business has its inherent challenges, I believe the shares still offer some worthwhile appreciation potential now that rates are firming up.

Read the full article here:
Better Pricing Bodes Well For Lancashire Holdings After A Tough Year

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