Lloyd's of London profit down slightly in 2024 as combined ratio slips

(Alliance News) - Insurance and reinsurance market Lloyd's on Thursday said catastrophe claims from the US for hurricanes Milton and Helene and for the Baltimore bridge collapse reduced profit in 2024, despite a rise in written premiums.

Pretax profit was GBP9.6 billion last year, down 10% from GBP10.7 billion in 2023, reflecting both a reduced underwriting result and a lower investment return.

Gross written premiums rose 6.5% to GBP55.5 billion in 2024 from GBP52.1 billion in 2023. However, the insurance market's underwriting result fell by 10% to GBP5.3 billion from GBP5.9 billion.

This was as its combined ratio worsened to 86.9% from 84.0%. A combined ratio below 100% indicated profit on underwriting, so the lower the better. The higher combined ratio was due to the major claims ratio rising to 7.8% in 2024, as a result of catastrophe claims, including the two hurricanes and the bridge collapse, Lloyd's said.

Six people died in March last year when a fully laden cargo ship crashed into the Francis Scott Key Bridge in Baltimore harbour, causing the bridge to collapse.

However, Lloyd's noted that its underlying combined ratio improved to 79.1% in 2024 from 80.5% in 2023.

Meanwhile, investment return declined to GBP4.9 billion last year from GBP5.3 billion the year before. Lloyd's said that, while higher interest rates helped investment performance throughout 2024, mark-to-market losses prompted by market volatility in the final quarter of the year resulted in the reduced annual outcome.

Lloyd's said it remains financially strong, with a central solvency ratio of 435%, down from 503% in 2023.

"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 strong as it has ever been," said Chief Executive Officer John Neal.

By Tom Waite, Alliance News editor

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