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Lloyd’s balance sheet, capital management and solvency in strong position to respond to COVID-19

Thu 26 Mar 2020

Lloyd’s has today confirmed that the market is in a strong position to respond to the impacts of COVID-19 and support its customers and business partners, following the publication of its 2019 annual results.

In 2019, Lloyd’s net resources increased by 8.6% to £30.6bn, reflecting an exceptionally strong balance sheet and a central solvency ratio of 238%.

Although there has been a high degree of turbulence in the financial markets over recent weeks, as at 19 March Lloyd’s solvency ratio stood at 205%. The exceptional strength of the market’s balance sheet has been further bolstered by Lloyd’s return to a profit of £2.5bn (2018: loss of £1.0bn) in 2019, driven by the repair in investment markets in the first half of 2019.

John Neal, Lloyd’s CEO, said:

“Whilst we are pleased to be announcing Lloyd’s return to profitability in 2019 and continued progress across our priorities, our primary focus right now is on supporting our customers and business partners in their time of need. I am confident in Lloyd’s ability to meet the challenges before it, and in doing so demonstrate the market’s unrivalled ability to support people, businesses and countries around the world in response to the far-reaching impacts of COVID-19.

As we focus on supporting our business partners and customers during this time, it has also never been more important to accelerate progress on our ambition to create the most advanced insurance marketplace through the Future at Lloyd’s. We have sharpened our focus for 2020, prioritising initiatives that will ensure around 80% of Lloyd’s business is digitally supported, together with fast-tracking claims processing improvements and building the foundational data and technology infrastructure to support Lloyd’s future ecosystem.” 

Bruce Carnegie-Brown, Lloyd’s Chairman, added:

“The beginning of 2020 has proved exceptionally difficult as COVID-19 spreads rapidly around the world with devastating consequences for families, communities and the global economy. Now more than ever, our customers need us to be ready to support them through these challenging times.

At Lloyd’s, we are laying the foundations to do this more effectively. By focusing on performance management, modernising the market and creating a market culture that will attract the best and brightest talent, we are making the market more resilient, more successful and better placed to meet our customers’ needs.”

Lloyd’s 2019 Annual Results in detail

Lloyd’s today announced a return to profit of £2.5bn (pre-tax) for 2019, representing an improvement of £3.5bn on the previous year (2018: a loss of £1.0bn) and an 8.8% return on capital (2018: (3.7%)).

The key figures reported in Lloyd’s 2019 Annual Report are:

  • Net resources of £30.6bn (2018: £28.2bn)
  • Central solvency and coverage ratio of 238% (2018: 249%; 19 March 2020: 205%)
  • Gross claims paid of £23.0bn (2018: £19.7bn)
  • Gross written premiums of £35.9bn (2018: £35.5bn)
  • Combined ratio of 102.1% (2018: 104.5%)
  • Aggregated market profit of £2.5bn (2018: loss of £1.0bn)

Lloyd’s return to profitability in 2019 is underpinned by strong performance across investments (2019: 4.8% return; 2018: 0.7% return), alongside sustained rate increases and improving underwriting discipline. Lloyd’s combined ratio saw an improvement of 2.4 percentage points to 102.1% (2018: 104.5%), with the underlying 2019 accident year ratio improving to 96.0% (2018: 96.8%), exclusive of major claims. These encouraging developments show Lloyd’s performance agenda is beginning to drive better underwriting discipline in the Lloyd’s market.

Gross written premiums (GWP) for the period totalled £35.9bn, marginally up from £35.5bn in 2018. This equates to a reduction in GWP of 2.6% after eliminating positive foreign exchange rate movements and is underpinned by a risk adjusted rate increase of 5.4%, indicating continued underwriting discipline across the market.


Results at a glance




Net resources£30.6bn£28.2bn
Solvency ratio238%249%
Gross written premiums£35.9bn£35.5bn
Gross claims paid£23.0bn£19.7bn
Combined ratio102.1%104.5%
Return on capital (annualised)8.8%(3.7%)
Pre-tax financial result£2.5bn(£1.0bn)


2019  Preliminary Results

  1. The Lloyd’s 2019 Annual Report can be accessed at: www.lloyds.com/annualresults2019
  2. A combined ratio is a measure of an insurer’s underwriting profitability based on the ratio of net incurred claims plus net operating expenses to net earned premiums. A combined ratio of 100% is break even (before taking into account investment returns). A ratio less than 100% is an underwriting profit.
  3. The metrics referred to in this release are defined in the Other Information section of the 2019 Annual Report, which includes details on financial metrics considered by Lloyd’s to be Alternative Performance Measures (APMs).”
  4. Central assets include the assets of the Central Fund and the other assets of the Corporation. In aggregate, the value of Lloyd’s central assets amounted to £3.3bn at 31 December 2019 (2018: £3.2bn). The Society financial statements are drawn up under IFRS (as adopted by the EU).
  5. Lloyd’s is rated AA- (very strong) with Fitch, A+ (strong) with Standard & Poor’s and A (excellent) with A.M. Best.
  6. Members’ resources operate on a several bases and are only available to meet each member’s share of claims. Central assets are available at the Council’s discretion to meet the liabilities of any member on a mutual basis.
  7. This press release includes forward-looking statements. These statements are based on currently available information. They reflect Lloyd’s current expectations, projections and forecasts about future events and financial performance. All forward-looking statements address matters that involve risks, uncertainties and assumptions. Based on a number of factors, actual results could vary materially from those anticipated by the forward-looking statements. These factors include, but are not limited to, the following:
    1. Rates and terms and conditions of policies may vary from those anticipated.
    2. Actual claims paid and the timing of such payments may vary from estimated claims and estimated timings of payments, taking into account the preliminary nature of such estimates.
    3. Claims and loss activity may be greater or more severe than anticipated, including as a result of natural or man-made catastrophic events.
    4. Competition affecting the basis of pricing, capacity, coverage terms or other factors may be greater than anticipated.
    5. Reinsurance placed with third parties may not be fully recoverable, or may not be paid on a timely basis, or such reinsurance from creditworthy reinsurers may not be available or may not be available on commercially attractive terms.
    6. Developments in the financial and capital markets may adversely affect investments of capital and premiums, or the availability of equity capital or debt.
    7. Changes in legal, regulatory, tax or accounting environments in relevant countries may adversely affect (i) Lloyd’s ability to offer its products or attract capital, (ii) claims experience, (iii) financial return, or (iv) competitiveness.
    8. Economic contraction or other changes in general economic conditions could adversely affect (i) the market for insurance generally or for certain products offered by Lloyd’s, or (ii) other factors relevant to Lloyd’s performance.
    9. The foregoing list of factors is not comprehensive, and should be read in conjunction with other cautionary statements that are included herein or elsewhere. Lloyd’s undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.
  8. Foreign exchange rates may materially fluctuate from the rates prevailing at 31 December 2019 (£1 = US$1.32, £1 = €1.18). Premiums, claims and investment income are translated at the average exchange rate for the year to 31 December 2019 (£1 = US$1.28, £1 = €1.14)

Enquiries to:

Nathan Hambrook-Skinner
Senior Media Relations Manager
Tel: +44 (0)20 7327 6125
Email: nathan.hambrook-skinner@lloyds.com

About Lloyd’s

Lloyd’s is the world’s leading insurance and reinsurance marketplace. Through the collective intelligence and risk-sharing expertise of the market’s underwriters and brokers, Lloyd’s helps to create a braver world.

The Lloyd’s market provides the leadership and insight to anticipate and understand risk, and the knowledge to develop relevant, new and innovative forms of insurance for customers globally.

It offers the efficiencies of shared resources and services in a marketplace that covers and shares risks from more than 200 territories, in any industry, at any scale.

And it promises a trusted, enduring partnership built on the confidence that Lloyd’s protects what matters most: helping people, businesses and communities to recover in times of need.

Lloyd’s began with a few courageous entrepreneurs in a coffeeshop. Three centuries later, the Lloyd’s market continues that proud tradition, sharing risk in order to protect, build resilience and inspire courage everywhere.