(Reuters) – Shares in Lloyd’s of London insurance company Lancashire rose nearly 10% on Thursday as it estimated net losses in Ukraine to about $ 20 million to $ 30 million, saying further potential losses in the region were within its risk tolerance levels.
Lancashire continues to monitor the situation in Russia and Ukraine and the impact on its political violence, air warfare and maritime insurance operations, as well as on its aviation and specialty insurance lines, the first quarter update said.
Lancashire’s shares fell to a low of more than 11 years after Russia’s invasion of Ukraine, as the company is seen as one of the insurance companies most exposed to aviation insurance losses, with hundreds of leased planes stranded in Russia after sanctions.
S&P Global sees global aviation-insured losses of up to $ 15 billion after the invasion, and analysts predicted a big hit for Lancashire.
“While continuing to analyze our potential exposure scenarios in Russia, we believe that any losses would be within our risk tolerances and would not affect our ability to deliver on our ambitious 2022 growth plans,” said CEO Alex Maloney.
“We remain confident that our strong balance sheet, robust capital position and talented underwriting team will provide us with further opportunities for profitable growth in 2022.”
Lancashire reported a pre-tax loss of $ 56.8 million for 2021.
KBW analysts said Lancashire’s initial loss estimate for Ukraine was “safe”, although they pointed out that the size of further losses in Russia remained uncertain. Analysts reiterated their overachieving rating.
Lancashire’s stock rose 9.6% to 435 pence at 0732 GMT, making it the best performing fund in the FTSE’s mid-cap index.
Lancashire’s gross revenue premiums rose 34.7% year-over-year to $ 477.9 million in the first quarter.
Second Lloyd’s insurance companies Beazley and Hiscox report results for the first quarter next week.