Lloyd’s of London expects £1.8bn hit from Californian wildfires
Lloyd’s of London, the historic insurance market, has reported a 6.5 per cent increase in premiums written for 2024.
In a trading update published ahead of its full results, which are set to be released on 20 March 2025, Lloyd’s said gross written premiums increased £55.5bn from £52.1bn in the prior year.
Lloyd’s attributed the premium growth to an 8.5 per cent increase in property and reinsurance gross written premium, coupled with a marginal price change of 0.3 per cent and a foreign exchange impact of negative 2.3 per cent.
The market’s combined ratio, a key measure of underwriting profitability, stood at 86.9 per cent, having increased by 2.9 percentage points from 2023 due to major claims in the second half of the year.
In recent weeks, insurers Beazley, Hiscox and Lancashire Holdings, all of which have a significant presence at Lloyd’s, have reported bumper results.
Beazley reported a record profit before tax of $1.4bn (£1.1bn) for 2024, a 13 per cent increase from the previous year.
While Hiscox also reported a record profit for the year ended 31 December 2024.
While the Californian wildfires were not included in the full-year results, Lloyd’s of London estimated the net loss to be approximately $2.3bn (£1.8bn).
Excluding large claims, the underlying combined ratio improved to 79.1 per cent, from 80.5 per cent in the prior year.
The investment return for the year was £4.9bn, down from £5.3bn in 2023.
The portfolio benefitted from high interest rates despite market volatility in the fourth quarter.
Underwriting profit reached £5.3bn, compared to £5.9bn in the previous year, while profit before tax came in at £9.6bn, down from £10.7bn.
The attritional loss ratio improved to 47.1 per cent, reflecting continued underwriting discipline, compared to 48.3 per cent in 2023.
The expense ratio remained unchanged at 34.4 per cent.
Burkhard Keese, Lloyd’s of London CFO, commented: “2024 saw us maintain our focus on strong profitability and disciplined growth. Our market delivered another excellent underwriting year for our investors, while providing best-in-class solutions for our customers to protect their business flows and balance sheets.”
He added: “We would like to extend our deepest sympathies to those affected by the California fires earlier this year. Although we are still assessing the full impact, we do not expect this to be a capital event.”
USD to GBP conversions were made using an exchange rate of GBP1 = USD1.28, as stated in the press release.