Lloyd’s 2024 Financial Results: A Year of Strong Performance
The year 2024 marked another period of robust performance for the Lloyd’s insurance and reinsurance marketplace. The institution reported a profit before tax of £9.6 billion and a combined ratio of 86.9%. Although this was a slight increase from the previous year’s 84%, it can be attributed to a rise in major claims due to significant events during the year.
Lloyd’s has officially released its comprehensive results for 2024, confirming key figures previously highlighted by the market. The premiums written saw a 6.5% increase, reaching £55.5 billion, primarily driven by a volume increase of 8.5%. Of this, 7.6% came from existing syndicates and 0.9% from new syndicates.
Key Drivers of Premium Growth
Once again, reinsurance and property were the main drivers of premium growth, with increases of £1.4 billion and £1.1 billion, respectively. Most lines experienced growth, contributing to a 57% increase in premiums from 2020’s £35.5 billion.
Despite a fall in the underwriting result from £5.9 billion in 2023 to £5.3 billion in 2024, the results remain significantly improved compared to the £2.6 billion gain in 2022 and £1.7 billion in 2021. Lloyd’s attributes this to strong underwriting actions, particularly in reinsurance and property, though less favorable conditions were observed in some casualty and aviation segments.
Combined Ratio and Major Losses
The combined ratio saw a year-on-year increase of 2.9 percentage points, reaching 86.9% in 2024. This includes a benefit of 2.4% from prior-year releases, as the major claims ratio escalated to 7.8% from 3.5%, due to significant events like Hurricanes Milton and Helene, and the Dali Baltimore Bridge collision. This major claims ratio, while elevated, remains below the five and ten-year averages of 10.8% and 10.6%, respectively.
Overall, major losses amounted to £3.169 billion in 2024, net of reinsurance and including reinstatements payable and receivable, marking a significant rise from the £1.283 billion in 2023.
Expense and Investment Performance
The expense ratio remained stable at 34.4%, comprising an acquisition expense ratio of 22.6% and an operating expense ratio of 11.8%. The solid underwriting performance was further supported by an improved attritional loss ratio of 47.1%, compared to 58.3% in 2023.
Excluding major claims, the underlying combined ratio improved to 79.1% in 2024 from 80.5% in 2023, underscoring the market’s focus on consistent profitability. The Lloyd’s investment result also remained strong, achieving a return of £4.9 billion, slightly down from £5.3 billion in 2023, representing a positive return on investment of 4.7% compared to 5.4% in 2023.
Looking Ahead
Looking forward, Lloyd’s anticipates that the losses from the Los Angeles wildfires, previously estimated at $2.3 billion, will bolster the 2025 rating environment and improve conditions for purchasing outwards reinsurance.
John Neal, Chief Executive Officer of Lloyd’s, stated, “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 robust as it has ever been.”
Bruce Carnegie-Brown, Chairman of Lloyd’s, emphasized, “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.”
Burkhard Keese, Chief Financial Officer, noted, “2024 saw us maintain our focus on strong profitability and disciplined growth.”
