John Neal
“At Lloyd’s, our focus in the first half of 2024 remained on supporting a profitable marketplace. That industry-leading performance has underpinned our ability to innovate and design the solutions our customers, businesses and governments need to manage their risks and balance sheets through increasing uncertainty.”
Coming into 2024, we knew the year would bring significant change – with over half the world’s population taking part in elections; persistently high interest rates and inflation; conflict in Europe and the Middle East; and beneath it all, the effects of a changing climate.
At Lloyd’s, our focus in the first half of 2024 remained on supporting a profitable marketplace that delivers sustainable and attractive returns for our investors, at a time when Lloyd’s global insurance premiums are growing at more than twice the rate of GDP. That industry-leading performance has underpinned our ability to innovate and design the solutions our customers, businesses and governments need to manage their risks and balance sheets through increasing uncertainty – maintaining and growing our relevance and value proposition around the world.
Strong, sustainable performance
Encouragingly, our half year results demonstrate Lloyd’s continued strong, sustainable, profitable performance. The market’s combined ratio, a key measure of underwriting profitability, improved to 83.7% – our best interim result since 2007 and supporting an overall profit of £4.9bn. This result was supported by resilient underlying profitability across the market, with a combined ratio excluding large and catastrophe risks of 80.6%, the twelfth consecutive quarter the market has performed with an underlying combined ratio around 80%.
We maintained targeted and sustainable growth, with gross written premium increasing by 6.5%. This is made up of 5% volume growth and 1.5% price increase, excluding adverse changes in foreign exchange movement of (2.1)%. This growth has been supported by new entrants to Lloyd’s in the first half of the year, notably Aviva and Fidelis demonstrating their support of our market. Additionally, we were pleased to welcome Apollo’s captive syndicate – the first to be launched under our enhanced captive proposition.
Market conditions remained favourable through the first half of 2024, driven by consistent underwriting discipline and against a backdrop of below average major losses. We continue to see positive trends across a number of lines, with property classes generally well priced and some attention and focus still needed on casualty classes. As a whole, we’re seeing ‘super cycle’ conditions based on a protracted period of stable capital and underwriting conditions.
The market continued to maintain a strong capital position, with a central solvency ratio – measuring the capital we hold against our regulatory requirements – of 520% and a market-wide solvency ratio of 206%. That balance sheet strength, alongside our consistent performance and strong strategic execution, saw AM Best upgrade Lloyd’s financial strength rating from A to A+, building on the upgrade from S&P Global at the end of last year.
Looking ahead, we know we must be prepared for a range of potential scenarios and remain alert to any potential changes in market dynamics including the impact of loss cost inflation and extreme weather events, alongside a changing macroeconomic and geopolitical landscape. With that in mind, at the halfway point of 2024, maintaining strong, profitable performance will be our number one priority.
Partnering for strategic success
Our strong performance in the year so far has enabled us to focus on strategic execution to create a purpose-driven, digitalised, inclusive marketplace.
Our digital transformation through Blueprint Two saw Lloyd’s and Velonetic continue to make progress to deliver a more resilient, flexible and future-proofed technology platform for our marketplace. This is a complex transformation programme, addressing legacy technology and process across the whole ecosystem of our marketplace, and this complexity has challenged our timeline. As a result, Lloyd’s and Velonetic have separated the work required to build, test and govern the technology change, and will only cutover to phase one digital services once it is safe to do so. Despite these complexities, we’re confident we have the right plan and people in place to execute the changes Blueprint Two is targeting in 2025.
At the same time, we have continued to show leadership across the issues that matter to our industry and customers: from developing a new carbon measurement tool in the Lloyd’s Lab with Moody’s Analytics, to publishing research on emerging risks like AI through the Lloyd’s Futureset research platform. Lloyd’s leadership of the Sustainable Markets Initiative (SMI) Insurance Task Force, together with our ongoing partnership with the United Nations Capital Development Fund (UNCDF), also helped unlock support to enable more climate resilient communities in Fiji and Papua New Guinea.
Meanwhile, we maintained our critical focus on supporting an inclusive and high performance culture. Lloyd’s 2024 Culture Dashboard reported steady improvement in both representation of diverse groups and behaviours observed across the market – while the rollout of Lloyd’s Inclusive Futures Coalition promises to accelerate our efforts to create a more diverse market by supporting Black and ethnically diverse individuals from the classroom to the boardroom.
"Maintaining strong, sustainable, profitable performance is our top priority, and our industry-leading results for the first half of 2024 – built on more than six years of progressively more profitable underwriting – are a testament to that focus."
Leading through times of change
Maintaining strong, sustainable, profitable performance is our top priority, and our industry-leading results for the first half of 2024 – built on more than six years of progressively more profitable underwriting – are a testament to that focus.
The superb start to the year has ensured we are well positioned to respond to global change through the second half of the year and into 2025. This, coupled with our persistent focus on strategic execution, gives us the confidence that we have frameworks in place to continue to support sustainable, long-term profitability for our investors, and to respond to the needs of our market’s customers as they navigate increasing risk and uncertainty.
Our ability to deliver strong and consistent financial performance, driven by underwriting discipline and the benefits of global scale, would not be possible without the combined commitment and efforts of our market members, brokers and partners around the world. Thank you for your continued support as we continue to deliver on our commitment to our customers, and build on the achievements and unique attributes that create the distinct investment proposition and opportunity in a growing Lloyd’s market.
John Neal
Chief Executive Officer
Back to Half Year results 2024