Lloyd's Q2 Market Message 2025

Lloyd’s 2025 Market Message Summary

On May 15, 2025, Lloyd’s of London delivered its Q2 Market Message, addressing the current challenges and strategic direction of the insurance marketplace. The presentation was notably marked by the final address of Patrick Tiernan as Chief of Markets before his transition to CEO. The message focused on underwriting performance, delegated business, capital and reserving, and strategic direction. The key theme throughout was "risk awareness, not risk aversion" and a call for discipline and realism as the market navigates uncertainty.

Performance Under Pressure

Rachel Turk, Chief Underwriting Officer, described the market as “fragile”, citing a Q1 risk-adjusted rate change (RARC) of -3.3%—below plan and indicative of softening conditions. Despite a bullish £66 billion GWP target set for 2025, revised forecasts suggest actual premium volumes may fall closer to the low £60 billion range. The view is that whilst syndicates are forecasting a small deficit on their GWP (gross written premium), Lloyd’s feel the miss might be bigger due to the RARC figures and so encouraging more remediation.

“We are not risk-off, but we are risk-aware,” Turk stated, warning that Lloyd’s will not support plans that prioritise growth over profitability. Underperforming syndicates can expect increased scrutiny, while high performers will receive more consultative oversight—but not a free pass.

Delegated Business Under the Microscope

Delegated authority arrangements remain under intense scrutiny. Lloyd’s has raised the bar for MGAs and large multi-class facilities, demanding stronger data, governance, and operational capabilities. Syndicates must clearly justify their delegated strategies or face restrictions.

“Not everyone with the desire will have the capability,” Turk warned. “Passive followers will not be tolerated.”

Capital and Reserving in an Uncertain World

In her first Market Message as CFO, Alex Cliff called for a reassessment of capital modelling in light of macroeconomic and geopolitical uncertainty. Inflation, currency volatility, and weakening global outlooks must be explicitly factored into reserves and capital assumptions.

“Capital is a scarce resource,” Cliff said. “Our balance sheet must reflect today’s risks and tomorrow’s unknowns.”

She emphasised that any significant deviation from plan—particularly when tied to changing management action—must trigger a capital review.

Claims: A Gateway to Underwriting

The shift toward making claims performance a “hurdle principle” by January 2026 was also underscored. Poor claims handling will impact underwriting permissions. The Faster Claims Payment project, which promises to unlock over £1.7 billion in trapped capital, is ready for large-scale adoption later this year.

A Final Word from Patrick Tiernan

In his final address as Chief of Markets, Patrick Tiernan reflected on four years of “disciplined growth through volatility,” urging the market not to lose ground.

“If we don’t maintain profitability, the rest won’t matter,” he said. “Now is not the time for complacency.”

Tiernan reiterated that Lloyd’s is committed to supporting syndicates who show preparedness, prudence, and the ability to seize opportunity—within a framework of sustained profitability and sound risk management.

For a comprehensive overview, including the full presentation and slides, please visit the official Lloyd’s website: Lloyds