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Lancashire Holdings' (LCSHF) CEO Alex Maloney on Q1 2018 Results - Earnings Call Transcript

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Lancashire Holdings Ltd. (OTCPK:LCSHF) Q1 2018 Earnings Conference Call May 3, 2018 8:00 AM ET


Alex Maloney - Group, CEO

Paul Gregory - Group Chief Underwriting Officer and CEO

Elaine Whelan - Group CFO and CEO, Lancashire Insurance Company Limited


Thomas Seidl - Bernstein

Kamran Hossain - RBC

Jonny Urwin - UBS

Ben Cohen - Investec

Darius Satkauskas - KBW

Thomas Fossard - HSBC

Alex Maloney

Okay. Thank you, everyone. Thank you for calling in for our Q1 call. I'm delighted with our first quarter results. Our underwriting portfolio has seen little loss activity in the quarter coupled with strong reserve releases mainly from the 2016 accident year. We have top line growth driven by the improved underwriting environment. And lastly, our hedging strategies has mitigated are mark-to-market investment loss as interest rates increase. We are, therefore, satisfied that strategic decisions we took coming into this year were the correct ones and insurance markets and investment markets are where we thought they would be. It's pleasing to see top line growth, which is partly driven positive rate movements and partly driven by new business across the majority of our portfolio. Even where rates are not positive such as terrorism, we have seen more rating discipline in the terrorism market than we have seen in many years.

We have commented before that we hope to achieve more rates across our underwriting portfolio, but as others have also commented, the underwriting environment is not currently there to push for more rates. But our portfolio is definitely more profitable than the market average so any positive change is accretive and margins are improving.

We see daily evidence of carriers taking corrective to improve the profitability of their underwriting portfolios. Not a day goes by where a headline doesn't pop up with another

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