Lloyd’s reports best Q1 underwriting profit since 2007 with combined rate of 83.7%

Insurance and reinsurance market Lloyd’s reported total pre-tax profit of £4.9bn ($6.4bn), up 25.6% from £3.9bn ($5 .1 billion dollars) reported in the first half of 2023.

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

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

“Underwriting discipline will, in the near future, be key to ensuring prudent underwriting and fairly compensating our investors,” said Lloyd’s chief financial officer Burkhard Keese, who noted that Lloyd’s first-half gross underwritten rose 6.5 percent to 30.6 billion pounds ($40.1 billion). a pound-to-pound basis, “which is measured and digestible”. This was driven by volume growth of 5.0% and price increases of 1.5%.

Keese warned that it was important to remember that the hurricane season was not yet over, but “the half-year profit of £4.9bn is certainly a good buffer for 2024”.

He said this “outstanding result” was driven by both underwriting profit of 3.1 billion pounds ($4.1 billion) and investment result of 2.1 billion pounds ($2.8 billions of dollars). In the first half of 2023, the return on investment was £1.8 billion ($2.4 billion).

First-half results are supported by “fairly small large losses”, but the underlying combined ratio of 80.6% (which excludes major losses) “is on target, reflecting our resilience to adverse developments”, Keese said.

TOPICS
Profit Loss Surplus Surplus Underwriting Lloyd’s