Robust Returns Despite Challenges
In 2024, the Lloyd’s insurance market demonstrated exceptional resilience and profitability, even amid significant claims activity, including the impact of two hurricanes in the United States. Despite these challenges, Lloyd’s nearly matched the previous year’s record profits, buoyed by favorable trading conditions and a return to more normal investment valuations.
Annual Report Highlights
The second annual report by Insurance Capital Markets Research (ICMR) and the Lloyd’s Market Association (LMA) provides an in-depth analysis of Lloyd’s and its syndicates’ performance for the year. The report highlights that nearly all syndicates reported underwriting profits.
Lloyd’s reported a gross written premium of £55.5 billion and a pre-tax profit of £9.6 billion for the 2024 financial year, underscoring its strong financial footing.
Investor Attraction and Capital Returns
The Lloyd’s 2025 Insights Report underscores the market’s continued ability to offer attractive returns on capital to investors, characterized by low correlation with other asset classes, which fuels sustained investor interest.
ICMR and LMA also noted that Lloyd’s returns on capital have traditionally been favorable compared to catastrophe bond indices and other mainstream investments, with lower correlation. The RISX equity index, a benchmark for the global specialty reinsurance sector with underwriting subsidiaries at Lloyd’s, reflects increasing investor expectations for positive underwriting returns.
Expert Insights
Markus Gesmann, co-founder of ICMR, remarked that the Lloyd’s market had another profitable year, outperforming peers and many other asset classes. However, he pointed out a lingering issue of capital deployment efficiency. Gesmann suggested that innovative models, like ‘barbell’ strategies, which initially deploy liquid funds in the sector before scaling up Funds at Lloyd’s when necessary, can meet investors’ and asset managers’ deployment requirements.
According to Paul Davenport, Finance & Risk Director at the LMA, nearly all syndicates achieved underwriting profits in 2024, despite being tested by major claims events absent in 2023. He noted that while 2024’s major claims were closer to average, they remained below long-term levels. Davenport observed that the post-COVID era was an opportune time for new syndicates to start underwriting at Lloyd’s, considering the additional costs and capital requirements for new entrants.
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