Increased interest rates drive up England's Lloyd's of London profits

Lloyd's of London, the world's leading insurance and reinsurance market, has released its financial results for the first half of 2025, revealing a mixed picture of growth and challenges.

The market's gross written premiums for the period increased to £32.5bn, marking a rise of 6.2% from the same period last year. This growth was primarily driven by a volume increase of 11.9% from new and existing syndicates. However, adverse foreign exchange movements led to a decrease of 2.2% in gross written premium.

Despite the growth in premiums, the market's combined ratio for the first half of 2025 rose from 83.7 per cent to 92.5 per cent, indicating an underwriting loss. Excluding major claims, Lloyd's reported an underlying combined ratio of 82.1 per cent, marginally higher than last year's ratio of 80.6 per cent.

Major claims returned to expected levels in the first half of 2025, driven by the devastating California wildfires. However, disciplined underwriting ensured the underlying result had the capacity to absorb such volatility.

The market's underwriting result for the first half of 2025 fell to £1.5bn, down from £3.1bn the previous year. The expense ratio for the period rose 1.3 per cent to 35.8 per cent, due to higher gross commissions and increased staff costs.

Despite a more challenging pricing environment and heightened uncertainty, the market continues to innovate and expand its global reach. The market's focus remains on facilitating sustainable and attractive returns on capital through the economic cycle for all market participants.

Lloyd's reported a profit before tax of £4.2bn for the first half of 2025. The market-wide solvency ratio rose to 206%, and Lloyd's reported a central solvency ratio of 468% (up from 435% at the end of 2024).

Patrick Tiernan, Lloyd's chief executive, stated that the market's capital position and solvency ratios provide a good foundation for future growth. He emphasised that the market continues to navigate a more challenging pricing environment and heightened uncertainty, but remains committed to delivering long-term value for its customers and shareholders.

The market's investment return for the first half of 2025 jumped to £3.2bn, up from £2.1bn, boosted by higher reinvestment yields and a favourable rate environment.

Patrick Tiernan has been the CEO of Lloyd's of London since September 2020. Under his leadership, the market has continued to adapt and evolve, positioning itself for success in the ever-changing global insurance landscape.