Lloyd’s Full Year Results – March 20th 2025

The Lloyd’s Market has reported a pre-tax profit of £9,626m for 2024 on a combined ratio of 86.9% (2023: profit £10,663m; 84%), being a return of 21% on average capital (2023: 25%). The underwriting result was negatively impacted by a 4.3 point increase in major losses which offset the 1.2 point improvement in the attritional loss ratio and the 0.2 point improvement in prior year reserve releases. The expense ratio was stable. The investment result was significant but reduced by 2.2 points of Net Premiums Earned (NPE) with the reduction in mark-to-market profits outweighing the increase in investment income.

The 86.9% combined ratio was in line with SRL’s expectation of a combined ratio of around 88% (Lloyd’s Monitor December 2024).

Gross Premiums Written (GPW) increased by 6.5% to £55.5bn attributable to 8.5% volume growth (split 7.6% from existing and 0.9% from new syndicates), 0.3% price growth, and -2.3% from foreign exchange movements.

The underwriting result was a profit of £5,314m (2023: £5,910m). The loss ratio was 52.5% (2023: 49.6%) with major losses (incl. Hurricane Milton, Hurricane Helene, and the Dali Baltimore Bridge collision) contributing an increased though below-average 7.8% of NPE (2023: 3.5%; 10-year average 9.5% excluding COVID). The attritional loss ratio improved to 47.1% of NPE (2023: 48.3%) compared to Lloyd’s target of 50%.

Prior year releases increased slightly to 2.4% of NPE (2023: 2.2%), with releases across most lines of business but strengthening required for Reinsurance Casualty, Reinsurance Specialty and Aviation; 2023 was Lloyd’s 19^th consecutive year of overall prior year releases. The expense ratio was again stable at 34.4% (2023: 34.4%) with total expenses reducing very slightly to 35.7% of NPE (2023: 35.8%).

Investment returns reduced but were still significant at 12.2% of NPE (2023: 14.4%) with the portfolio benefiting from another year of higher interest rates.

Lloyd’s overall profit of 23.8% of NPE compares to a profit of 28.9% NPE in 2023. The 2024 profit was in line with SRL’s expectation of a bottom-line profit of 20% – 25% NPE (Lloyd’s Monitor December 2024).

SRL notes that the accident year combined ratio excluding major losses improved by 1.2 points to 81.5% (calendar year combined ratio excluding major losses 79.1%, net of prior year releases) and compares favourably to the 10-year and 5-year average major claims (excluding COVID) for Lloyd’s of 9.5% and 9% NPE respectively. The improvements following Lloyd’s Performance Review of 2018 and the benefits of price increases in recent years, notwithstanding the slowing momentum in 2024, have continued to flow through to the reported results.

For 2025, SRL expects Lloyd’s to continue to reap the benefits of sustained rate increases in recent years and previous portfolio remediation action including the re-underwriting of Cat risk, together with the focus on cost control as part of Lloyd’s target expense ratio reduction to 31.5% for 2025. However, unless the level of major losses is very low and against a backdrop of much lower price increases in 2024 and continuing concerns over social inflation, it is unlikely that 2025 will match 2024’s underwriting and investment performance. For 2025, Lloyd’s is forecasting a combined ratio of 90-95% assuming a normal level of major losses, and an investment return of around 4% (24: 4.7%).

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