Lloyd’s Reports Best H1 Underwriting Profit Since 2007, With 83.7 Combined Ratio

The Lloyd’s insurance and reinsurance market reported overall profit before tax of £4.9 billion (US$6.4 billion), a 25.6% increase from the £3.9 billion (US$5.1 billion) reported during H1 2023.

The combined ratio, which is a key measure of underwriting profitability, improved to 83.7 (from 85.2 in H1 2024), providing Lloyd’s with its best interim result since 2007. (A combined ratio below 100 indicates underwriting profits.)

“Lloyds has a unique proposition, blending leading financial performance, consistent underwriting and capital discipline, and the benefits of scale that come from a truly global marketplace,” according to Lloyd’s CEO John Neal during a media briefing to discuss the results.

“Underwriting discipline will be in the foreseeable future key to ensure prudent underwriting and to fairly compensate our investors,” said Lloyd’s CFO Burkhard Keese, who noted that Lloyd’s gross written premium during H1 grew by 6.5% to £30.6 billion ($40.1 billion) on a sterling to sterling basis, “which is measured and digestible.” This was driven by volume growth of 5.0% and price increases of 1.5%.

Keese warned it’s important to keep in mind that the hurricane season is not over yet but “the £4.9 billion half year profit is certainly a good buffer for 2024.”

He said this “outstanding result” is driven by both the underwriting profit of £3.1 billion ($4.1 billion) and the investment result of £2.1 billion ($2.8 billion). During H1 2023, investment return was £1.8 billion ($2.4 billion).

The H1 results are supported by “rather low large losses,” but the underlying combined ratio of 80.6 (which excludes major losses) “is at target level reflecting our resilience to adverse developments,” Keese said.