Coinciding with a rise in claims ratio attributed to several large-scale catastrophe events, premier re/insurance market Lloyd’s reported a lower profit before tax of £9.6 billion for 2024, down from £10.7 billion in 2023.
The major claims ratio increased to 7.8%, reflecting the impact of large-scale catastrophe events, including hurricanes Milton and Helene and the Baltimore Bridge collision. Despite this, Lloyd’s said that it maintained its focus on profitability, with a stable expense ratio of 34.4%.
The underwriting result for the year also saw a decline at £5.3 billion, compared with £5.9 billion in 2023. Lloyd’s reported an improved attritional loss ratio of 47.1%, down from 48.3% in the previous year, and prior year releases of 2.4%, slightly higher than the 2.2% recorded in 2023.
Although not included in its full-year results for 2024, Lloyd’s previously confirmed that its net loss estimates from the California wildfires based on currently available information sits at approximately US$2.3 billion.
Despite the small decline, Lloyd’s CEO John Neal (pictured) said the market had delivered another strong financial performance, highlighting underwriting discipline and capital strength.
Gross written premium for the year, meanwhile, rose to £55.5 billion, up from £52.1 billion in 2023, representing a 6.5% increase. The growth was driven primarily by an 8.5% rise in volume, including 7.6% from existing syndicates and 0.9% from new entrants.
Price changes contributed 0.3% as rate momentum stabilised, while foreign exchange movements reduced the overall increase by 2.3%.
The overall combined ratio stood at 86.9%, compared to 84.0% a year earlier, while the underlying combined ratio improved to 79.1% from 80.5%.
Investment returns totalled £4.9 billion, also down from £5.3 billion in 2023. Lloyd’s attributed the decrease to mark-to-market losses from fourth-quarter market volatility, although overall performance remained supported by higher interest rates throughout the year.
Lloyd’s central solvency ratio stood at 435%, down from 503% in the prior year. The market cited continued growth and capital management initiatives aimed at reducing debt as contributing factors.
The renewal of the Central Fund cover in 2024 was also noted as a measure to support long-term market stability and financial strength.
Lloyd’s financial strength ratings also reached their highest levels to date following an upgrade by AM Best in 2024. All four ratings now stand at AA- or equivalent.
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