Lloyd’s of London, the storied insurance market and one of the world’s largest providers of reinsurance, has reported a jump in profit for the first half of 2024.
Lloyd’s reported an overall profit before tax of £4.9bn, up from the figure of £3.9bn reported in the same period of 2023.
Gross written premiums rose to £30.6bn, up from £29.3bn in 2023.
The market reported a combined ratio of 83.7 per cent —a measure of insurance industry profitability based on the ratio of net incurred claims plus net operating expenses to net earned premiums—down from 85.2 per cent. A combined ratio of 100 per cent or below signals underwriting profitability.
Over the past five years, the insurance industry has been hit by a record level of losses, but Lloyd’s has been able to offset rising losses with higher insurance premiums and tighter underwriting standards.
Recently, Verisk, a risk modelling firm, said insurers should be “prepared to experience total annual insured losses from natural catastrophes of $151bn on average, and well more than that in large loss years.”
For 2023, Lloyd’s reported an underwriting profit of £3.1bn, up £0.5bn. Higher interest rates on the group’s investment portfolio helped it to an investment return of £2.1bn, up from £1.8bn.
Lloyd’s recorded a market-wide solvency ratio of 206 per cent, down slightly from the 207 per cent reported at the end of 2023.
Lloyd’s chief, John Neal said: “The first half of 2024 has presented a superb set of results for the Lloyd’s market which represents a combination of disciplined underwriting, smart organic growth and real strength in the Lloyd’s balance sheet.”
“This is good news for both investors in the Lloyd’s insurance marketplace and our customers as we continue to support them in an increasingly risky world,” Neal added.