Bermuda-based insurance and reinsurance firm Lancashire Insurance Holdings is very pleased with the outcome of its outwards reinsurance at the January 1, 2026 renewals, with the firm’s Chief Underwriting Officer (CUO) Paul Gregory particularly highlighting a strategic reduction in the firm’s aggregate attachment point.
As he explained to analysts during the call, Gregory said that Lancashire is “very pleased” with the outcome of its outwards reinsurance renewals at the Jan 1, 2026.
“As we’ve said, the one benefit of the softening market is the products we buy to protect our earnings and balance sheet are also more efficient. We can manage our reinsurance spend, which helps mitigate some of the margin pressure on the inwards book,” the CUO said.
“And importantly, we have better tailored the structure of our reinsurance to box in our exposures, which better manages our earnings volatility. As an example, the aggregate catastrophe products that we described last year renewed at 1.1 with a lower attachment point and more limit. This provides more certainty of underwriting results in an active catastrophe loss year.”
Furthermore, in 2025, Lancashire opted to utilise part of its available capacity to buy-out the outstanding names on Syndicate 2010.
Although this increased share indicates that the firm has taken on additional catastrophe risk, Gregory emphasised the ongoing contraction of the inwards retro portfolio, influenced by market conditions, along with the advantages of a more streamlined reinsurance program.
Gregory continued: “To re-emphasise and repeat what Alex and I have both said, rates remain in a good place for the majority of classes. With this in mind, and our proven track record of cycle management, we would anticipate our topline to remain broadly stable during 2026. Our net cat footprint will likely be marginally lower than last year.
“Whilst we have assumed more cat risk with an increased share of syndicate 2010, we have continued to shrink our inward retro portfolio in light of market conditions, as well as seeing the benefit of a more efficient reinsurance programme.”
During the call, Gregory was questioned on the cost of reinsurance for 2026, and whether Lancashire is potentially looking to buy more or look to reduce any of the risk limits further.
“We would expect our RI spend in dollar terms to be broadly stable compared to 2025. So, you’re right, we’re definitely seeing the benefit of a softening reinsurance market, and that comes through in less premium spend. And as I mentioned in my script, there was also the opportunity to tailor better structured reinsurance products to help manage our earnings volatility.
“So, we’ve taken some of that saving and used it there to construct a more all-encompassing reinsurance protection for the business, to help us maintain sustainable earnings cycle. So, very simply, very similar spend year-on-year,” the CUO said.
Also, during the call, CEO Maloney commented on the outcome of Lancashire’s inwards reinsurance renewals at 1/1 2026.
“Looking at the market backdrop more broadly, we have always believed the market is cyclical, and whilst we have seen a more competitive market, the portfolio we secured at the 1st of January renewals is still one of the best we have ever had, in terms of rate adequacy,” Maloney explained to analysts.
“The group RPI is still well ahead of pre-2023 levels, and this is reflective of a market where, after a few profitable years, the supply of capital has increased as existing players deploy more retained earnings. And this tends to be more disciplined capital.”
He continued: “Demand, meanwhile, has not kept pace with the increased supply of capital. But I do want to emphasise that margins remain favourable, particularly at the net level, taking into account reinsurance costs. This gives us confidence when looking at our profitability for 2026 and beyond.”
Gregory also added: “To summarise the recent 1.1 renewal season, we’re very pleased with our performance, where we managed the more competitive environment well and secured an outcome in line with our expectations. This sets us up very well to execute on our plans for the remainder of the year.
“As always, we appreciated the ongoing support we received from our clients and brokers, and look forward to building on these valued relationships.”
