Higher interest rates boost Lloyd’s of London
Lloyd’s of London, the world’s leading insurance and reinsurance market, has reported a profit before tax of £4.2bn for the first half of 2025.
Gross written premiums climbed to £32.5bn, up from £30.6bn reported for the same period last year.
Its underwriting result fell to £1.5bn, down from £3.1bn the previous year, as the market’s combined ratio rose from 83.7 per cent to 92.5 per cent. A combined ratio below 100 per cent indicates an underwriting profit, while a ratio above 100 per cent signals an underwriting loss.
Excluding major claims, such as the impact of the California wildfires in the first quarter of 2025, Lloyd’s reported an underlying combined ratio of 82.1 per cent, marginally higher than last year’s ratio of 80.6 per cent.
The expense ratio rose 1.3 per cent to 35.8 per cent with higher gross commissions and increased staff costs reported by the market in the first half of the year.
The market’s investment return jumped to £3.2bn, up from £2.1bn, boosted by higher reinvestment yields and a favourable rate environment.
Premium growth helps Lloyd’s
Overall, gross written premium rose 6.2 per cent, driven by volume growth (11.9 per cent) from new and existing syndicates operating within the Lloyd’s market.
However, growth was offset by adverse foreign exchange movements (-2.2 per cent) and pricing (-3.5 per cent).
Overall, the market’s return on capital stood at 20.7 per cent, slightly down from 21.0 per cent.
Lloyd’s reported a central solvency ratio of 468 per cent (up from 435 per cent at the end of 2024), while the market-wide solvency ratio rose to 206 per cent.
Patrick Tiernan, Lloyd’s chief executive said: “Lloyd’s syndicates delivered a solid half year performance, demonstrating strength and resilience. While major claims returned to expected levels – driven by the devastating California wildfires – disciplined underwriting ensured the underlying result had the capacity to absorb such volatility. Investment performance was strong, and the market’s capital position and solvency ratios provide a very good foundation for future growth.
“Looking ahead, despite a more challenging pricing environment and heightened uncertainty, the market continues to innovate and expand the global reach of the Lloyd’s platform through existing participants, new entrants and a strong pipeline of businesses looking to join the market. Our focus remains on facilitating sustainable and attractive returns on capital through the economic cycle for all market participants.”