Lancashire Holdings Limited – Half Year Results for the Six Months Ended 30 June 2024

We have continued to see rates remain positive across our product suite with a Group RPI for the period of 102%. Our strategic focus has always been to adapt to the market cycle and grow the business when the environment is right, while actively managing our capital to support those underwriting opportunities. This includes our new U.S. operation, which has made a fantastic start with an extremely strong team across our underwriting and support functions.

The loss environment in the first half of 2024 was relatively active for the industry with significant insured market events including the MV Dali Baltimore bridge collision disaster. None of these events were individually material for the Group and we delivered a strong underwriting performance.

Our results have also been supported by our growing investment portfolio, which is now approaching $3 billion in size. We have continued to benefit from the higher yield environment with positive net returns of 2.3% or $75.2 million.

With our strong balance sheet and capital base, we remain in excellent health going into the second half of the year.

Based on our strong performance in the first six months of the year, we are well on track to deliver on our full year guidance for an average loss year undiscounted combined ratio in the mid-80% range, and an RoE, as measured by change in diluted book value per share, of around 20%.

In March, we announced a change to our regular final and interim dividend policy to increase returns to our shareholders. For the first half of 2024, the Board has declared an ordinary interim dividend of 7.5 cents per common share consistent with this policy.

Across Lancashire we have committed people who are the foundation of our strong, positive culture and commercial success. We place value on maintaining our distinct ways of working and collaborative approach, which make us an extremely attractive employer that is able to recruit and retain the very best talent in the sector. We also continue to support the important work of the Lancashire Foundation and, due to the strong operational performance of the Group in 2023, the Board has approved the maximum level of funding to aid its charitable work this year.

As we head into the remainder of 2024, building on this record half-year performance, we look with confidence to 2025 and beyond. I would like to thank everyone at Lancashire for their hard work, and our clients, brokers and shareholders for their support."

Underwriting results

Gross premiums written

Gross premiums written increased by $98.2 million, or 8.3% during the first six months of 2024 compared to the equivalent period in 2023. Excluding the impact of reinstatement premiums and multi- year contracts, underlying growth in gross premiums written was 9.8%. The Group's two principal segments, and the key market factors impacting them, are discussed below.

Reinsurance segment

Gross premiums written for the first six months of 2024 increased by $76.6 million, or 11.6% when compared to the same period in 2023. The property reinsurance and specialty reinsurance lines were the significant drivers of growth.

Insurance segment

Gross premiums written for the first six months of the year increased by $21.6 million, or 4.1% when compared to the same period in 2023. This increase was primarily driven by new business within the property segment, including business written through both our Lancashire U.S. and Lancashire Australia distribution channels, as well as the continued build-out of the property construction class. These increases were partly offset by the timing of multi-year renewals in the political risk and marine classes.

Insurance revenue

Insurance revenue increased by $133.2 million, or 18.5% for the first six months of 2024 compared to the same period in 2023. Growth was more substantial for insurance revenue than gross premiums written as we continue to benefit from earnings coming through from prior underwriting years. Gross premiums earned, which is a major driver of insurance revenue, as a percentage of gross premiums written was 76.9% for the first six months of 2024 compared to 69.8% in the first six months of 2023.

Allocation of reinsurance premiums

Allocation of reinsurance premiums increased by $1.0 million, or 0.5% during the first six months of 2024 compared to same period in 2023. The allocation of reinsurance premiums as a percentage of insurance revenue for the Group was 25.0%, down from 29.5% in the prior period, reflecting more efficient reinsurance purchasing and increased risk retention in the strong market environment.

Net claims

During the first six months of 2024, the Group experienced net losses (undiscounted, including reinstatement premiums) from large loss events totalling $45.5 million. None of these events were individually material for the Group, with the MV Dali Baltimore bridge collision loss being the most significant.

In comparison, during the first six months of 2023, the Group experienced net losses (undiscounted, including reinstatement premiums) from catastrophe and large loss events totalling $49.5 million. None of these loss events were individually material for the Group.

Favourable prior accident year loss development, including reinstatement premiums and expense provisions, was $52.0 million during the first six months of 2024. This was primarily due to better attritional loss experience than expected in the 2023 accident year, along with catastrophe event reserve releases, most notably on the 2021 accident year. In comparison, favourable development of $72.1 million for the equivalent period in 2023 was driven by loss reserve releases on the 2022 and 2021 accident years.

The first six months of 2024 and 2023 also both benefited from the release of expense provisions and net reductions in reinstatement premiums. This reduction was more pronounced in the prior period.

Net discounting benefit

The table below shows the total net impact of discounting in respect of both insurance contracts issued, and reinsurance contracts held, by financial statement line item.

The total impact of discounting for the first six months of 2024 was a net benefit of $40.0 million, compared to a net benefit of $15.8 million in 2023. The higher initial discount in the first six months of 2024 compared to the same period in 2023 is due to the growing insurance portfolio increasing the quantum of initial loss reserves being established within a higher discount rate environment. This higher discount rate environment also results in an increasing net expense through the unwind of discount relative to the prior year. Interest rates have generally increased since 31 December 2023 generating a positive impact from the change in assumptions. In the prior period, the impact of the change in yield curve assumptions was relatively minor given a more stable discount rate environment.

Investments

The total investment return, including realised and unrealised gains and losses, was 2.3% for the first six months of 2024. The positive returns were driven by investment income as our portfolio continues to benefit from higher yields on a growing portfolio. Treasury yields rose throughout the first and second quarter of 2024, with most of the increase in yields occurring during the first quarter. This resulted in higher returns in the second quarter, with coupon income helping to mitigate the increase in treasury yields and slight spread widening. In addition to the higher investment income, the private investment funds and remaining hedge fund had strong returns throughout the six months.

The Group's investment portfolio, including unrealised gains and losses, returned 2.2% for the first six months of 2023. The majority of the gains were generated in the first quarter as treasury rates declined. In the second quarter, investment income mitigated negative returns from the upward shift in the yield

curve. All asset classes performed positively, with most of the returns in the second quarter driven by the alternative assets.

The managed portfolio was invested as follows:

Key investment portfolio statistics for our fixed maturity securities and managed cash and cash equivalents were:

Other operating expenses

The most significant driver of the increase in operating expenses for the first six months of 2024, compared to the equivalent period in 2023, was an increase in fixed costs of $20.7 million. This increase is primarily in relation to employment related expenses given the recent growth in headcount for the Group. The strengthening U.S. dollar exchange rate against GBP sterling also contributed to an increase in operating expenses.

For the first six months of 2024, $51.8 million of operating expenses were considered directly attributable to the fulfillment of insurance contracts issued, and have therefore been re-allocated to insurance service expenses and form part of the insurance service result. This compares to $39.3 million for the equivalent six month period in 2023, and is reflective of the increase within the Group's overall expense base as discussed above.

Capital

As at 30 June 2024, total capital available to Lancashire was approximately $2.0 billion, comprising shareholders' equity of $1.6 billion and $0.4 billion of long-term debt. Tangible capital was approximately $1.8 billion. Leverage was 22.2% on total capital and 24.5% on tangible capital. Total capital and total tangible capital as at 31 December 2023 were $2.0 billion and $1.8 billion respectively.

Dividends

On 7 August 2024, Lancashire's Board of Directors declared an interim dividend of $0.075 (approximately £0.06) per common share, which will result in an aggregate payment of approximately $18 million. The dividend will be paid in Pounds Sterling on 13 September 2024 (the "Dividend

Payment Date") to shareholders of record on 16 August 2024 (the "Record Date") using the £ / $ spot market exchange rate at 12 noon London time on the Record Date.

Financial Information

The Unaudited Condensed Interim Consolidated Financial Statements for the six months ended 30 June 2024 are published on Lancashire's website at www.lancashiregroup.com.

Analyst and Investor Earnings Conference Call

There will be an analyst and investor conference call on the results at 1pm UK time / 9am Bermuda time / 8am EDT on Thursday 8 August 2024. The conference call will be hosted by Lancashire management.

Participant Registration and Access Information:

Audio conference call access:

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Webcast access:

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Please use this link to register and access the call via webcast.

A webcast replay facility will be available for 12 months and accessible at:

https://www.lancashiregroup.com/en/investors/results-reports-and-presentations.html

About Lancashire

Lancashire, through its operating subsidiaries, is a provider of global specialty insurance and reinsurance products. The Group companies carry the following ratings:

1. Financial Strength Rating and Financial Strength Outlook apply to Lancashire Insurance Company Limited and Lancashire Insurance Company (UK) Limited.
2. Long Term Issuer Rating applies to Lancashire Holdings Limited.

Lancashire Syndicates Limited benefits from Lloyd's ratings: A.M. Best: A (Excellent); S&P Global

Ratings: AA- (Very Strong); and Fitch: AA- (Very Strong).

Lancashire's common shares trade in the equity shares (commercial companies) category of the Main Market of the London Stock Exchange under the ticker symbol LRE. Lancashire has its head office and registered office at Power House, 7 Par-la-Ville Road, Hamilton HM 11, Bermuda.

The Bermuda Monetary Authority is the Group Supervisor of the Lancashire Group. For more information, please visit Lancashire's website at www.lancashiregroup.com.

NOTE REGARDING RPI METHODOLOGY

THE RENEWAL PRICE INDEX ("RPI") IS AN INTERNAL METHODOLOGY THAT MANAGEMENT USES TO TRACK TRENDS IN PREMIUM RATES OF A PORTFOLIO OF INSURANCE AND REINSURANCE CONTRACTS. THE RPI WRITTEN IN THE RESPECTIVE SEGMENTS IS CALCULATED ON A PER CONTRACT BASIS AND REFLECTS MANAGEMENT'S ASSESSMENT OF RELATIVE CHANGES IN PRICE, TERMS, CONDITIONS AND LIMITS AND IS WEIGHTED BY PREMIUM VOLUME. THE RPI DOES NOT INCLUDE NEW BUSINESS, TO OFFER A CONSISTENT BASIS FOR ANALYSIS. THE CALCULATION INVOLVES A DEGREE OF JUDGEMENT IN RELATION TO COMPARABILITY OF CONTRACTS AND THE ASSESSMENT NOTED ABOVE. TO ENHANCE THE RPI METHODOLOGY, MANAGEMENT MAY REVISE THE METHODOLOGY AND ASSUMPTIONS UNDERLYING THE RPI, SO THE TRENDS IN PREMIUM RATES REFLECTED IN THE RPI MAY NOT BE COMPARABLE OVER TIME. CONSIDERATION IS ONLY GIVEN TO RENEWALS OF A COMPARABLE NATURE SO IT DOES NOT REFLECT EVERY CONTRACT IN THE PORTFOLIO OF CONTRACTS. THE FUTURE PROFITABILITY OF THE PORTFOLIO OF CONTRACTS WITHIN THE RPI IS DEPENDENT UPON MANY FACTORS BESIDES THE TRENDS IN PREMIUM RATES.

NOTE REGARDING FORWARD-LOOKING STATEMENTS

CERTAIN STATEMENTS AND INDICATIVE PROJECTIONS (WHICH MAY INCLUDE MODELLED LOSS SCENARIOS) MADE IN THIS RELEASE OR OTHERWISE THAT ARE NOT BASED ON CURRENT OR HISTORICAL FACTS ARE FORWARD-LOOKING IN NATURE INCLUDING, WITHOUT LIMITATION, STATEMENTS CONTAINING THE WORDS "BELIEVES", "AIMS", "ANTICIPATES", "PLANS", "PROJECTS", "FORECASTS", "GUIDANCE", "POLICY", "INTENDS", "EXPECTS", "ESTIMATES", "PREDICTS", "MAY", "CAN",

"LIKELY", "WILL", "SEEKS", "SHOULD", OR, IN EACH CASE, THEIR NEGATIVE OR COMPARABLE TERMINOLOGY. 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. FOR A DESCRIPTION OF SOME OF THESE FACTORS, SEE THE GROUP'S ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2023 AND THE GROUP'S UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2024. IN ADDITION TO THOSE FACTORS CONTAINED IN THE GROUP'S ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2023 AND THE GROUP'S UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2024, ANY FORWARD-LOOKING STATEMENTS CONTAINED IN THIS RELEASE MAY BE AFFECTED BY: THE IMPACT OF THE COLLAPSE OF THE FRANCIS SCOTT KEY BRIDGE IN BALTIMORE WHICH OCCURRED IN THE FIRST QUARTER OF 2024, AND THE CONTINUED HOSTILITIES IN THE MIDDLE EAST AND THEIR IMPACT ON THE REGION, GLOBAL SUPPLY ROUTES AND INSURANCE AND FINANCIAL MARKETS. ALL FORWARD-LOOKING STATEMENTS IN THIS RELEASE OR OTHERWISE SPEAK ONLY AS AT THE DATE OF PUBLICATION. LANCASHIRE 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 STATEMENT TO REFLECT ANY CHANGES IN THE GROUP'S EXPECTATIONS OR CIRCUMSTANCES ON WHICH ANY SUCH STATEMENT IS BASED. ALL SUBSEQUENT WRITTEN AND ORAL FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO THE GROUP OR INDIVIDUALS ACTING ON BEHALF OF THE GROUP ARE EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THIS NOTE. PROSPECTIVE INVESTORS SHOULD SPECIFICALLY CONSIDER THE FACTORS IDENTIFIED IN THIS RELEASE AND THE REPORT AND ACCOUNTS NOTED ABOVE WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER BEFORE MAKING AN INVESTMENT DECISION.