Lloyd’s Market Message Quarter 3, 2024

In her market message for Lloyd's Q3 2024 results, Chief Underwriting Officer Rachel Turk emphasized the strong turnaround in the market's underwriting performance, demonstrated by a combined ratio of 83.7%. This performance improvement has enabled Lloyd's to step back from "invasive" oversight of syndicates, signalling that managing agents and syndicates will now have greater responsibility for maintaining underwriting discipline. Turk highlighted key risks, including inflationary pressures in the U.S. casualty market, rising claims costs, and cyber threats, warning that profitability could be threatened without careful management.

She spoke about the uncertain times in the property market referencing the hurricane season and highlighting the impacts that wildfire, flooding and convective storms have had in outpacing other perils, but indicated that increased volatility leads to opportunities. On cyber, she made the point that Crowdstrike was a warning to the market and demonstrated the necessity to fully understand exposures which has led to the formation of a cyber oversight framework to ensure the Lloyd’s cyber portfolio is appropriately written. US general liability is a concern with claims inflation remaining a major headwind to price adequacy but she said that corrective action was being taken by the market to reduce line sizes and focus on where capacity is being employed, to ensure that exposure were not expanding into areas which might threaten recovery. Her final two focus areas were on the legacy market where all new legacy deals will require pre-transaction approval from 1 January 2025, and delegated business where Lloyd’s is expecting a clearly articulated strategy from syndicates who are responsible for holding their delegates to account. Importantly, she mentioned the area of data and that this must improve both in terms of its timeliness and accuracy.

Overall the message was optimistic and re-enforced the need to maintain profitable results supported by strong underwriting performance.”

A video recording of her presentation and slides can be found here: https://www.lloyds.com/news-and-insights/news/market-message-september-2024.