Lancashire Holdings Ltd on Friday said that its loss in 2022 narrowed on increased demand for its products, though this could not be met by an increase in the supply of capacity.

The Bermuda-based insurer focused on property, energy, marine and aviation insurance said that its pretax loss in 2022 narrowed to $2.8 million from $56.8 million a year ago.

The total investment return, however, turned to negative 3.5% from positive 0.1%. The company said that volatility in the global financial markets during 2022 and higher interest rates impacted its investments.

‘From a capital perspective, we held a very strong position throughout the year and we have the necessary headroom to continue to write profitable business, and deliver returns, during what we expect to be a harder market in 2023. As we look into 2023, wider capacity constraints – due particularly to the increasing cost of capital and historic loss activity – are expected to give us considerable opportunities to further strengthen our franchise at a time in the cycle of expanding margins,’ Lancashire said.

Lancashire declared an unchanged final year dividend of $0.15 per share.

Looking ahead, the company noted a ‘strong’ start to 2023, with a market-wide reassessment of property catastrophe risk.

‘Pricing, coverage, as well as terms and conditions, all responded favourably, substantially improving expected returns,’ Lancashire said.

Lancashire shares were 0.7% lower at 623.73 pence each in London on Friday morning.

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