Lloyd’s announces a 21% return on capital for 2024, demonstrating strong performance for investors, says Neal.

Lloyd’s Reports Strong 2024 Results with 21% Return on Capital

Lloyd’s insurance and reinsurance market delivered solid returns in 2024, despite a sharp rise in major claims. While the combined ratio increased to 86.9% from 84.0% in 2023 due to significant losses from Hurricane Milton, Hurricane Helene, and the Dali Baltimore Bridge collision, the underlying combined ratio improved to 79.1% from 80.5%, underscoring the market’s resilience and profitability.

Lloyd’s reported a pre-tax profit of £9.6 billion for the year, down from £10.7 billion in 2023, with underwriting profits of £5.3 billion (compared to £5.9 billion in 2023) and investment returns of £4.9 billion (down from £5.3 billion). The softer market conditions, increased volatility in investment markets, and higher major losses contributed to the decline. However, CEO John Neal still called 2024 "one of our most profitable underwriting years in recent history."

Lloyd’s premium volume grew by 6.5% to £55.5 billion in 2024, with an 8.5% increase in volume offset slightly by exchange rate effects. The market has also become more attractive to investors, with a 21% return on capital showcasing the potential for those looking to allocate funds.

Neal emphasized Lloyd’s continued focus on disciplined underwriting and sustainable profitability, stating that the market’s strong financial performance, underwriting discipline, and global reach make it a compelling opportunity for investors, underwriters, and brokers. While the return on capital dipped from 25.3% in 2023, the seven-year average now stands at 7.6%.

With two consecutive years of strong returns, Lloyd’s has drawn increased interest from insurance-linked securities (ILS) investors seeking diversification. Although some investors remain cautious, consistent 20%+ returns have bolstered Lloyd’s appeal, potentially attracting more capital in the years ahead.