Lloyd’s posts strong £9.6bn profit for 2024 despite rise in major losses

2024 was another strong year for the specialist Lloyd’s insurance and reinsurance marketplace, with profit before tax of £9.6 billion and a combined ratio of 86.9%, slightly up on the previous year’s 84% amid a higher major claims ratio due to significant events in the year.

Today, Lloyd’s has released its full results for 2024, confirming some of the key figures reported by the market last week, including a 6.5% increase in premiums written to £55.5 billion, primarily driven by volume of 8.5%, of which 7.6% is from existing and 0.9% from new syndicates.

In 2024, reinsurance and property were again the primary drivers of premium growth with an increase of £1.4 billion and £1.1 billion, respectively, although most lines experienced growth in the year.

Lloyd’s has grown its premiums consistently in recent years, with 2024’s £55.5 billion up 57% on 2020’s premiums written of roughly £35.5 billion.

The market’s underwriting result fell from £5.9 billion in 2023 to £5.3 billion in 2024, but remains much improved on 2022’s £2.6 billion and 2021’s £1.7 billion gain. Lloyd’s highlights the continued benefits from the market’s strong underwriting action, led by the reinsurance and property segments, partially offset by less favourable conditions in certain areas of casualty and aviation.

Year on year, the combined ratio deteriorated by 2.9 percentage points to 86.9% in 2024, with a benefit of 2.4% from prior year releases, as the major claims ratio increased to 7.8% from 3.5% due to significant events including Hurricanes Milton and Helene, and the Dali Baltimore Bridge collision. While up year on year, a major claims ratio of 7.8% is below the five and 10 year averages of 10.8% and 10.6%, respectively.

All in all, major losses totalled £3.169 billion for the Lloyd’s market in 2024, net of reinsurance and including reinstatements payable and receivable, up significantly on 2023’s major loss expenditure of £1.283 billion.

As the major claims ratio increased, the expense ratio remained steady for Lloyd’s in 2024 at 34.4%, with an acquisition expense ratio of 22.6% and an operating expense ratio of 11.8%.

The solid underwriting performance was underpinned by an improved attritional loss ratio of 47.1%, compared with 58.3% in 2023.

Excluding major claims, the underlying combined ratio strengthened to 79.1% in 2024 from 80.5% in 2023, which highlights the market’s continued focus on consistent profitability.

Supporting another solid underwriting performance, the Lloyd’s investment result was also strong, benefiting from another year of higher interest rates, producing a return of £4.9 billion, so down by roughly £400 million on 2023’s £5.3 billion. For 2024, this represents a positive return on investment of 4.7%, compared with 5.4% in 2023.

Overall, profit before tax has come down by almost 10% year on year to £9.6 billion from almost £10.7 billion in 2023, but is still considerably better than 2022’s loss of £769 million, 2021’s profit of £2.3 billion, and the loss of £887 million reported by the market in 2020.

Looking ahead, Lloyd’s says that the Los Angeles wildfires, which the market previously pegged its losses from at $2.3 billion, are expected to support the 2025 rating environment and an improved environment for buying outwards reinsurance.

“The Lloyd’s market has delivered another year of outstanding financial performance, with a superb combined ratio, underlying combined ratio and attritional loss ratio supporting a capital position and claims reserve strength that is as strong as it has ever been,” said John Neal, Chief Executive Officer, Lloyd’s.

“This excellent result demonstrates the market’s ability to deliver sustainable and attractive returns for investors, and provide solutions to protect our customers’ balance sheets. I would like to congratulate members of the market for their disciplined underwriting and profitable growth and thank Corporation employees for their commitment and support in 2024,” he added.

Bruce Carnegie-Brown, Lloyd’s Chairman, commented: “Our market’s performance in 2024 underpins the important role we play in maintaining and strengthening the UK’s global position in wholesale and commercial insurance.”

“2024 saw us maintain our focus on strong profitability and disciplined growth,” said Burkhard Keese, Chief Financial Officer.

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