Author Topic: LRE.L - Lancashire Holdings Ltd  (Read 361669 times)

WhoIsWarren

  • Sr. Member
  • ****
  • Posts: 284
Re: LRE.L - Lancashire Holdings Ltd
« Reply #1370 on: October 12, 2018, 06:50:45 AM »
Cigarbutt - looking the share price alone is not fair the dividends since 2010 have been substantial! The dividend adjusted share price at the start of 2010 was 1.70 (i.e. a 3-bagger all in). 

Now if you'd said since 2013.....  :(

Hopefully, won't need to go back to the time when marine underwriters used to record the sinking of ships with quill pens (oops, some apparently are still doing that in the Lloyd's world).

Actually, if I'm not mistaken Lloyd's records - with a quill pen - all merchant ships (above a certain size I presume) that go down.  This isn't done by the underwriters, but rather one of the "waiters".  Lloyd's is a very traditional place, really cool to go on a tour if you're ever in London.

I'm sure you know it but Lloyd's is only one of Lancashire's four platforms.  But the point you're making is valid - a lot of insurance is a commodity.  To "beat the market" you either have to write niches that are more protected / have some barriers to entry, or else stay very disciplined.  Lancashire tries to do a combination of the two.  The second of these is much like what a good (value?) investor in the capital markets does. In fact there are similarities with the current investing and insurance markets don't you think?  Low interest rates and falling perceptions of risk have encouraged investors into both.


Cigarbutt

  • Hero Member
  • *****
  • Posts: 1129
Re: LRE.L - Lancashire Holdings Ltd
« Reply #1371 on: October 12, 2018, 08:17:46 AM »
Actually, if I'm not mistaken Lloyd's records - with a quill pen - all merchant ships (above a certain size I presume) that go down.  This isn't done by the underwriters, but rather one of the "waiters".  Lloyd's is a very traditional place, really cool to go on a tour if you're ever in London.

I'm sure you know it but Lloyd's is only one of Lancashire's four platforms.  But the point you're making is valid - a lot of insurance is a commodity.  To "beat the market" you either have to write niches that are more protected / have some barriers to entry, or else stay very disciplined.  Lancashire tries to do a combination of the two.  The second of these is much like what a good (value?) investor in the capital markets does. In fact there are similarities with the current investing and insurance markets don't you think?  Low interest rates and falling perceptions of risk have encouraged investors into both.

Thank you for the perspective WhoIsWarren.
That's actually quite a fascinating topic (risk perception).

I'm looking for a new book that may not exist yet: From coffee house to blockchain.
https://www.linkedin.com/pulse/chainthat-17th-century-london-market-coffee-house-rick-huckstep

The trend has certainly been to put emphasis on the complexity of models and on the quantity of data, which makes person-to-person haggling outdated. A risk though is that the wall of data complexity may put a veil in the growing distance between the basic underwriter and the actual pricer. I'm only a guy typing on screen but really wonder if the underwriting responsibility with its embedded fundamental analytical power is not being partially discarded by alternative forms of intelligence. The basic underwriter (actuarial side) is, by definition, partly playing blind and final pricing results form a whole lot of inputs and incentives that are far from transparent and rational. At times, it's what you don't know that can kill you and wonder if this is not such a time when down-to-earth historical long-term perspective should at least be considered, in terms of downside risk.

For the insurance underwriting part, here's a link, for which I cannot locate the origin, that was probably written with a typewriter but which may be more relevant than ever.

https://www.casact.org/pubs/forum/88fforum/88ff241.pdf
Let the good times roll.
« Last Edit: October 12, 2018, 08:19:40 AM by Cigarbutt »