The report reveals that Lloyd’s continues to deliver highly favourable returns to investors, with profits just shy of the previous year's record, driven by favourable trading conditions and a return to more normal investment valuations. Despite major claims activity in 2024, including two US hurricanes, almost all individual syndicates reported an underwriting profit.
Key findings from the report include:
Lloyd’s reported £55,546m of gross written premium and a pre-tax profit of £9,626m for the 2024 financial year and so continues to offer an attractive return on capital to investors with low correlation compared with other asset classes.
Major claims at 7.8% for 2024, while higher than 2023, remained below the long-term average of closer to 10%.
The expense ratio remained unchanged at 34.4% compared with 2023 and the report explores the influence of distribution channel on acquisition expenses and combined ratio.
The positive impact of performance management at Lloyd’s is evident in the long-term underwriting results since its introduction in 2003.
The RISX equity index, a benchmark for the global specialty (re)insurance sector with underwriting subsidiaries at Lloyd’s, shows accelerating investor expectations of positive returns from underwriting.
The report offers a deeper understanding of the drivers and trends underlying Lloyd’s performance for managing and members’ agencies, brokers and investors. It highlights that Lloyd’s is still seen as an attractive place to invest, with increasing capital markets’ confidence.
Paul Davenport, Finance & Risk Director at the LMA, said: “At an individual syndicate level, almost all syndicates have made an underwriting profit in 2024, despite the market being tested by some major claims events which were absent in 2023. While closer to average, 2024 major claims still fell below long-term levels. Given the extra costs and capital loadings applied to start-up syndicates, the analysis shows that the post-COVID window was clearly a good time to commence underwriting in Lloyd’s.”
Markus Gesmann, co-founder of ICMR, added: “The Lloyd’s market had another profitable year, outperforming peers and many other asset classes, yet a key issue remains of capital deployment. To improve efficiency and leverage strong returns, innovative models like 'barbell' strategies, initially deploying liquid funds in the sector before scaling up Funds at Lloyd's when needed, can be used to satisfy investors’ and asset managers’ deployment requirements.”
Lloyd's 2025 Insights Report
|
