Lloyd’s Interim Results H1 2024

September 5th 2024 – The Lloyd’s Market reported an underwriting profit of £3,067m on a combined ratio of 83.7% for the six months to 30 June 2024 (H1 2023 £2,500m and 85.2%). The investment return was a gain of £2,142m (H1 2023 1,808m), generating an overall pre-tax profit of £4,916m or 26.1% of net premiums earned (H1 2023 profit of £3,920m, 23.2% NPE), equivalent to an annualised return on average capital of 22.2% (H1 2023 19.4%).

The combined ratio improved by 1.5 percentage points (pp), and the attritional loss ratio improved by 1.7pp to 49.2%. The expense ratio improved by 0.9pp to 34.5%. Major claims contributed 3.1% of net premiums earned (H1 2023 3.6%), marking a relatively light period for catastrophe losses. Prior year reserve releases were 3.1% of net premiums earned (H1 2023 4.7%). Lloyd’s continues to forecast a combined ratio of 90-95% for FY24 assuming a normal level of major losses.

The investment profit of £2,142m, representing an investment return of 2.1%, was primarily driven by strong fixed income returns complemented by high growth in equity markets. Lloyd’s continues to forecast an investment return of around 4% for FY24. Asset allocation remains conservative with 72% held in corporate and government bonds and 21% in cash and LOCs. Equities and alternative assets were 7% of the total.

Gross premiums written rose 4.4% to £30.6bn with FX movements (chiefly the US dollar against sterling) generating -2.1% and volume growth 5%. Price rises contributed 1.5%, marking 26 consecutive quarters of positive price improvement. There were small price improvements across most major business lines and geographies, partially offset by casualty which experienced a small decrease in the period with the cyber and D&O classes within this line continuing some rate reductions.

Total capital / net resources, including the Corporation’s subordinated debt, reduced by 3.9% compared to YE23 to £43.5bn. Lloyd’s Central Solvency Capital Requirement (CSCR) coverage ratio was 520% at 30 June 2024 (FY 2023 503%) compared to Lloyd’s risk appetite / minimum of 200%. The Market-wide Solvency Capital Ratio was 206% at 30 June 2024 (FY 2023 207%).

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