Insurer Lancashire plans £93m special dividend after swinging to profit

City-based insurer Lancashire has unveiled a special dividend aiming to award around $119m (£93m) to shareholders after swinging to an annual profit.

The group’s pretax profit came in at $321.5m (£252.6m) for 2023, compared with a $15.5m (£12.2m) loss in 2022.

Its gross premiums written rose 17 per cent year-on-year to $1.9bn, with insurance revenue jumping 24 per cent to $1.5bn.

Lancashire’s net investment return came in at $160.5m (£126.1m) last year, up from a loss of $76.7m (£60.3m) in 2022.

The insurer had previously authorised a share buyback of up to $50m (£39m), which it did not complete.

It has today unveiled a special dividend of 50 cents (39p) per share to make up for it and reflect the company’s strong performance.

Lancashire said the special dividend would result in a total payout of around $119m (£93m). It follows a previous 50 cent (39p) special dividend paid in December.

The board has also declared a final dividend of 15 cents (12p) for 2023, up 50 per cent from 2022. Lancashire plans to increase its ordinary interim dividend to 7.5 cents (5.9p) per share.

Lancashire expected the market to be “more stable” in 2024, with “healthier levels of profitability”.

Chief executive Alex Maloney said on Wednesday: “Lancashire delivered an outstanding performance in 2023. We continued to focus on writing profitable business in the best market conditions we have seen for a decade.

“Aligned to our belief in managing the market cycle, we have built a better balanced and more diverse underwriting portfolio over the past five years, which is generating more profit against our capital base. This has been one of our core strategic goals and will continue to be a focus going forwards.”

Shares dipped 3.4 per cent on Wednesday morning.