Lloyd’s reports £4.2 billion profit in half year

Lloyd’s has posted strong results for the first half of 2025. The profit was £4.2bn. This is down by £700m on the same period in 2024. The major difference was the incidence of major losses. Major losses in the first six months of 2025 cost the market more than £2 billion. These added 10 percentage points to the combined ratio, which came in at 92.5%. In 2024, first half major losses were just £600m. The half year combined ratio in 2024 was 83.7%.

Summary results are as follows:

Top line premiums increased by 6.2% despite the impact of increasing competition which reduced average rate on renewal by 3.5%. The entry of several new syndicates, bringing new business into the market was a positive factor, although strengthening of the pound against the US dollar did have a negative impact.

The attritional loss ratio, which looks at the more predictable small and medium losses and ignores the more volatile major and catastrophe losses improved to 48.3% of net premiums, down from 49.2% in the same period last year. Lloyd’s has targeted this metric to stay below 50%. With attritional losses at this level, the market is able to absorb the costs of natural catastrophes and deliver profit to its capital providers.

Most significant in the year so far is the series of wildfires across Greater Los Angeles which forced the evacuation of 200,000 people, burned 60,000 acres of land and caused around $100 billion of economic loss. The overall cost to the insurance industry is around $40 billion, and Lloyd’s share is put at £1.7 billion (US $2.3 billion). The half year results were also impacted by the settlement of claims relating to aircraft leased by western companies to Russian airlines and stranded in the aftermath of the invasion of Ukraine.

Lloyd’s continues to issue guidance for the full year results of gross premiums of £60 billion, with a combined ratio of 90% to 95%. Investment returns, which are generally based on short dated high quality fixed interest assets, are expected to be around 4%.

The full results can be found here and the analysts’  presentation slides here. The results presentation including a forward-looking view of syndicate plans and Lloyd’s aspirations for 2026 can be found here.

The combined ratio is an indication of the profitability of an insurer. It expresses claims and expenses as a proportion of premium. A combined ratio of 100% means that the insurer is breaking even from its underwriting operations and below 100% indicates an underwriting profit. The investment return, arising out of premiums invested to exploit the timing difference between receiving premium and paying claims, is in addition to the underwriting profit.