Lloyd’s reports “solid” first half £3.5 billion profit

The attritional loss ratio², an important indicator of underlying profitability, increased from 48.3% to 51.1%. The movement is largely explained by price reductions, with Lloyd’s reporting that average renewal prices fell by 6.7% in the half year.

The underwriting result rose to £1.9bn, compared with £1.5bn in the first half of 2025. However, the headline improvement largely reflects a lower number of major claims to date, rather than stronger underlying performance across the board.

Major and catastrophe losses are more random; the half year result in 2025 was impacted by the wildfires in Greater Los Angeles. There was no similar event in 2026 and, to date, the hurricane season has been relatively benign, resulting in the major loss element of the loss ratio being down from 10.4% to 6.8%.

Syndicate reserves continue to be robust. Releases from prior underwriting years improved the loss ratio by 3.5 percentage points (2.0 percentage points in the first half of 2025).

_{1 A combined ratio is a key measure of an insurer’s underwriting profitability. It compares the claims and operating expenses incurred with the premium earned. Lower is favourable. 
2 The measure of residual insurance claims as a percentage of earned premiums (net of reinsurance). Attritional insurance claims are calculated as total claims with major losses and movements in prior year claims reserves subtracted.}

Investment returns weigh on the overall results

The major difference in the results was a much lower investment return.

Lloyd’s continues to have a high quality, short dated investment portfolio, largely of corporate and government bonds. In 2025, bond yields were going down, which increases the value of a bond portfolio. In 2026, yields have been increasing and portfolio values have been falling.

Mark to market rules show a loss on investment in the first half year. However, this is entirely unrealised, and the syndicates will see the benefit of the higher yields in the second half of the year. 

Middle East conflict

Lloyd’s revealed its first estimate of the costs of the conflict in the Middle East. The hostilities are continuing and evolving with some second order impacts including inflation, business interruption and supply chain issues.

With an overall impact of £1.4 billion to the market, and based on exposures and damage observed to date, Lloyd’s does not consider this to be a capital event for the market. Lloyd’s centrally is helping syndicates navigate exposures and claims arising, and assisting the market in supporting clients with interests in the region, demonstrating the market remains open for business. 

Discipline as market conditions become more challenging

More broadly, the results come against a backdrop of softening prices and increasing competition. The combined ratio result is on track to be a strong result, but with a market-wide price reduction of 6.7% during the first half, this places greater emphasis on risk selection and underwriting discipline as the market moves into a more challenging phase of the cycle.

Tiernan put it separately: “Our priority must be to protect underwriting quality and sustainable returns.”

This focus on underwriting discipline is encouraging for capital providers. As capital advisers, we similarly want to see sustainable growth and careful risk selection prioritised, particularly after an exceptional run of market results and as pricing conditions become more competitive.

Summary results are as follows:

Six months to 30 June for each period

Lloyd’s stated that its guidance for the year is unchanged. It anticipates gross premiums of £64 billion (with a 5% tolerance either way) and a combined ratio in the range 90% to 95%.

You can access the full Lloyd’s Half Year Results here: Half Year Results 2026

Or read the Chief Executive statement here: Chief Executive Statement Half Year Results 2026 | Lloyd's