Despite major claims activity in 2024, including two US hurricanes, Lloyd’s continued to deliver highly favourable returns to investors, with profits just shy of the previous year’s record, driven by favourable trading conditions and a return to more normal investment valuations.
These findings come from the second annual report by Insurance Capital Markets Research (ICMR) and the Lloyd’s Market Association (LMA), which provides a detailed analysis of Lloyd’s and its syndicates’ 2024 results, revealing that nearly all individual syndicates reported an underwriting profit.
Lloyd’s reported £55.5 billion of gross written premium and a pre-tax profit of £9.6 billion for the 2024 financial year.
With this in mind, the Lloyd’s 2025 Insights Report noted that the market continues to offer an attractive return on capital to investors, with low correlation to other asset classes, driving ongoing investor interest.
ICMR and LMA additionally suggested that Lloyd’s returns on capital have traditionally compared favourably to cat bond indices and other mainstream investments, also showing lower correlation.
“The RISX equity index, a benchmark for the global specialty re/insurance sector with underwriting subsidiaries at Lloyd’s, shows accelerating investor expectations of positive returns from underwriting,” the joint report added.
Markus Gesmann, co-founder of ICMR, commented, “The Lloyd’s market had another profitable year, outperforming peers and many other asset classes, yet a key issue remains of capital deployment.
“To improve efficiency and leverage strong returns, innovative models like ‘barbell’ strategies, initially deploying liquid funds in the sector before scaling up Funds at Lloyd’s when needed, can be used to satisfy investors and asset managers deployment requirements.”
Paul Davenport, Finance & Risk Director at the LMA, said, “At an individual syndicate level, almost all syndicates have made an underwriting profit in 2024, despite the market being tested by some major claims events which were absent in 2023.
“While closer to average, 2024 major claims still fell below long-term levels. Given the extra costs and capital loadings applied to start-up syndicates, the analysis shows that the post-COVID window was clearly a good time to commence underwriting in Lloyd’s.”
The post Lloyd’s continued to deliver in 2024 despite major claims activity: ICMR, LMA appeared first on ReinsuranceNe.ws.