London Stock Exchange listing offers the group financial flexibility

evaluation rating finance

AM Best has revised the outlook to positive from stable and affirmed the issuer credit ratings of a of Lancashire Insurance Company(Bermuda) and Lancashire Insurance Company (UK).

The rating agency has also affirmed the financial strength rating (FSR) of A (excellent) of Lancashire. The outlook for the FSR is stable.

AM Best said the rating reflects Lancashire’s excellent risk-adjusted capitalisation, very strong operating results since inception, experienced management team and the financial flexibility afforded to the group by the listing of Lancashire Holdings’ shares on the London Stock Exchange.

Additionally, the ratings reflect the group’s strong enterprise risk management (ERM) framework, which has mandated its conservative operating strategies. This customised ERM framework has produced excellent underwriting results, which has enabled Lancashire to consistently generate return measures at the high end of its peer group.

Partially offsetting these positive attributes is the company’s exposure to low frequency, high severity events owing to its targeted lines of business.

Lancashire’s operations include a diversified mix of business, both geographically and by class, including direct short-tail property insurance and reinsurance, energy and terrorism, as well as a small portfolio of third-party AV52 aviation liability and marine risks, including hull and protection and indemnity coverage.