Q1 2011 Reported Losses and Japan Update
LANCASHIRE HOLDINGS LIMITED
15 March 2011
Hamilton, Bermuda
First Quarter Reported Losses and Japanese Earthquakes and Tsunami Update
Lancashire Holdings Limited (the "Company") announces that to date in the first
quarter of 2011 the Company's operating subsidiaries have pre-tax net losses
estimated to be in the range of US$45 million to US$55 million (net of
reinstatement premiums and reinsurance) for prospective property losses arising
from the 22 February 2011 Christchurch, New Zealand earthquake, the recent
Australian weather related events (the New Zealand and Australian events
combined account for estimated losses in the range of US$15 million to US$25
million), an energy loss in the UK sector of the North Sea, and losses in the
group's terrorism portfolio arising from the recent political unrest in Egypt.
Actual losses may differ from the estimated range.
The Company is monitoring its potential underwriting exposures in Japan and the
Pacific region to the earthquakes and tsunami centred off the north east coast
of Japan, which took place on 11 March 2011, and which have resulted in the
tragic loss of life and significant property damage. The Company believes that
it is premature to estimate a meaningful indicative reserving range for these
events or the resulting impact on first quarter results, reinstatement premiums
or market pricing. A further announcement will be made once information
becomes available to make a more informed estimate of the expected losses.
For further information, please contact:
Lancashire Holdings Limited
Christopher Head +44 (0)20 7264 4145
chris.head@lancashiregroup.com
Jonny Creagh-Coen +44 (0)20 7264 4066
jonny.creagh-coen@lancashiregroup.com
Haggie Financial +44 (0)20 7417 8989
Peter Rigby (Peter Rigby mobile 07803851426)
About Lancashire
Lancashire, through its UK and Bermuda-based insurance subsidiaries, is a
global provider of specialty insurance products. The Group companies carry the
following ratings:
Financial Long Term Issuer Outlook
Strength
Rating (2)
Rating (1)
A.M. Best A- BBB- Positive
Standard & Poor's A- BBB Stable
Moody's A3 Baa2 Stable
(1)Financial Strength Rating applies to Lancashire Insurance Company Limited
and Lancashire Insurance Company (UK) Limited
(2) Long Term Issuer Rating applies to Lancashire Holdings Limited
Lancashire has capital in excess of $1 billion and its Common Shares trade on
the main market of the London Stock Exchange under the ticker symbol LRE.
Lancashire is headquartered at Power House, 7 Par-la-Ville Road, Hamilton HM
11, Bermuda. The mailing address is Lancashire Holdings Limited, P.O. Box HM
2358, Hamilton HM HX, Bermuda. For more information on Lancashire, visit the
Company's website at www.lancashiregroup.com
Lancashire Insurance Company (UK) Limited is regulated by the Financial
Services Authority in the UK.
Lancashire Marketing Services (Middle East) Limited is authorised and regulated
by the Dubai Financial Services Authority.
Lancashire Insurance Company Limited is regulated by the Bermuda Monetary
Authority in Bermuda.
NOTE REGARDING FORWARD-LOOKING STATEMENTS:
CERTAIN STATEMENTS AND INDICATIVE PROJECTIONS (WHICH MAY INCLUDE MODELED LOSS
SCENARIOS) MADE THAT ARE NOT BASED ON CURRENT OR HISTORICAL FACTS ARE
FORWARD-LOOKING IN NATURE INCLUDING WITHOUT LIMITATION, STATEMENTS CONTAINING
THE WORDS 'BELIEVES', 'ANTICIPATES', 'PLANS', 'PROJECTS', 'FORECASTS',
'GUIDANCE', 'INTENDS', 'EXPECTS', 'ESTIMATES', 'PREDICTS', 'MAY', 'CAN',
'WILL', 'SEEKS', 'SHOULD', OR, IN EACH CASE, THEIR NEGATIVE OR COMPARABLE
TERMINOLOGY. ALL STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL FACTS
INCLUDING, WITHOUT LIMITATION, THOSE REGARDING THE GROUP'S FINANCIAL POSITION,
RESULTS OF OPERATIONS, LIQUIDITY, PROSPECTS, GROWTH, CAPITAL MANAGEMENT PLANS,
BUSINESS STRATEGY, PLANS AND OBJECTIVES OF MANAGEMENT FOR FUTURE OPERATIONS
(INCLUDING DEVELOPMENT PLANS AND OBJECTIVES RELATING TO THE GROUP'S INSURANCE
BUSINESS) ARE FORWARD-LOOKING STATEMENTS. SUCH FORWARD-LOOKING STATEMENTS
INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER IMPORTANT FACTORS THAT
COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE GROUP TO BE
MATERIALLY DIFFERENT FROM FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED
OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS.
THESE FACTORS INCLUDE, BUT ARE NOT LIMITED TO: THE NUMBER AND TYPE OF INSURANCE
AND REINSURANCE CONTRACTS THAT WE WRITE; THE PREMIUM RATES AVAILABLE AT THE
TIME OF SUCH RENEWALS WITHIN OUR TARGETED BUSINESS LINES; THE LOW FREQUENCY OF
LARGE EVENTS; UNUSUAL LOSS FREQUENCY; THE IMPACT THAT OUR FUTURE OPERATING
RESULTS, CAPITAL POSITION AND RATING AGENCY AND OTHER CONSIDERATIONS HAVE ON
THE EXECUTION OF ANY CAPITAL MANAGEMENT INITIATIVES; THE POSSIBILITY OF GREATER
FREQUENCY OR SEVERITY OF CLAIMS AND LOSS ACTIVITY THAN OUR UNDERWRITING,
RESERVING OR INVESTMENT PRACTICES HAVE ANTICIPATED; THE RELIABILITY OF, AND
CHANGES IN ASSUMPTIONS TO, CATASTROPHE PRICING, ACCUMULATION AND ESTIMATED LOSS
MODELS; LOSS OF KEY PERSONNEL; A DECLINE IN OUR OPERATING SUBSIDIARIES' RATING
WITH A.M. BEST COMPANY AND/OR OTHER RATING AGENCIES; INCREASED COMPETITION ON
THE BASIS OF PRICING, CAPACITY, COVERAGE TERMS OR OTHER FACTORS; A CYCLICAL
DOWNTURN OF THE INDUSTRY; THE IMPACT OF A DETERIORATING CREDIT ENVIRONMENT
CREATED BY THE FINANCIAL MARKETS; A RATING DOWNGRADE OF, OR A MARKET DECLINE
IN, SECURITIES IN OUR INVESTMENT PORTFOLIO; CHANGES IN GOVERNMENTAL REGULATIONS
OR TAX LAWS IN JURISDICTIONS WHERE LANCASHIRE CONDUCTS BUSINESS; LANCASHIRE OR
ITS BERMUDIAN SUBSIDIARY BECOMING SUBJECT TO INCOME TAXES IN THE UNITED STATES
OR THE UNITED KINGDOM; AND THE EFFECTIVENESS OF OUR LOSS LIMITATION METHODS.
ANY ESTIMATES RELATING TO LOSS EVENTS INVOLVE THE EXERCISE OF CONSIDERABLE
JUDGEMENT AND REFLECT A COMBINATION OF GROUND-UP EVALUATIONS, INFORMATION
AVAILABLE TO DATE FROM BROKERS AND INSUREDS, MARKET INTELLIGENCE, INITIAL AND/
OR TENTATIVE LOSS REPORTS AND OTHER SOURCES. JUDGEMENTS IN RELATION TO LOSS
ARISING FROM NATURAL CATASTROPHE AND MAN MADE EVENTS INVOLVE COMPLEX FACTORS
POTENTIALLY CONTRIBUTING TO THESE TYPES OF LOSS, AND WE CAUTION AS TO THE
PRELIMINARY NATURE OF THE INFORMATION USED TO PREPARE ANY SUCH ESTIMATES.
THESE FORWARD-LOOKING STATEMENTS SPEAK ONLY AS AT THE DATE OF PUBLICATION.
LANCASHIRE HOLDINGS LIMITED EXPRESSLY DISCLAIMS ANY OBLIGATION OR UNDERTAKING
(SAVE AS REQUIRED TO COMPLY WITH ANY LEGAL OR REGULATORY OBLIGATIONS (INCLUDING
THE RULES OF THE LONDON STOCK EXCHANGE)) TO DISSEMINATE ANY UPDATES OR
REVISIONS TO ANY FORWARD-LOOKING STATEMENTS TO REFLECT ANY CHANGES IN THE
GROUP'S EXPECTATIONS OR CIRCUMSTANCES ON WHICH ANY SUCH STATEMENT IS BASED.
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