Lloyd’s Reports Combined Ratio of 92.5% on Drop in H1 Underwriting Result

Lloyd’s first half underwriting result dropped by half to £1.5 billion ($2.0 billion) from £3.1 billion ($4.2 billion) in H1 2024, which was driven primarily by claims from January’s California wildfires.

The market’s combined ratio rose to 92.5% (compared with 83.7% in H1 2024), while profit before tax dipped to £4.2 billion ($5.6 billion), compared with £4.9 billion ($6.6 billion) in H1 2024. (A combined ratio below 100 indicates an underwriting profit).

Nevertheless, Patrick Tiernan, Lloyd’s chief executive officer, and Chief Financial Officer Alexandra Cliff both described the results as “solid” during a recorded H1 message to the market.

Lloyd’s is seeing encouraging discipline and vigilance “as the market delivers a solid underwriting result and a credible return in more normal large loss conditions,” Tiernan said.

“These are solid results and tally with the guidance we issued at the start of the year,” said Cliff.

She noted that the results are built on the fundamentals of sustainable profit with consistent earnings from underwriting supported by investment income as well as a stable underlying combined ratio, a consistent return on capital and a very strong balance sheet, both in individual syndicates and centrally at the Corporation of Lloyd’s.

“Gross written premiums of £32.5 billion [$43.6 billion] is on trend, growing at 6.2%,” Tiernan said.

“Pricing softened by 3.5% on a risk-adjusted basis, giving us an underlying combined ratio of 82.1%, which is consistent with prior half-year results, but it will need to improve by year’s end, if volatility continues to tick up,” he continued. The market’s underlying combined ratio rose 1.5% from 80.6% in H1 2024. (The underlying combined ratio is the combined ratio excluding major claims.)

“However, at a market level, it is key that the underlying combined ratio remains at or below 80 to withstand volatility in major losses,” Cliff emphasized.

Tiernan said major losses are back in line with long-term trends – adding 10.4% to the reported combined ratio of 92.5%, which he said is solid in comparison to the market’s peers.

The investment return of £3.2 billion ($4.3 billion), or 3.1% (H1 2024: £2.1 billion, or 2.1%) “reflects conservative positioning, resulting in a creditable £4.2 billion profit for the first half of the year,” he said.

During H1 2025, the market paid £14 billion ($18.8 billion) “in claims driven by the California wildfires and aviation settlements relating to Russia/Ukraine,” Tiernan added.

Growth Varies by Class

Cliff explained that beneath the headline numbers, growth varies by class.

Reinsurance saw the strongest growth, up by £1.3 billion ($1.7 billion), which was driven by new entrants as well as strength in casualty reinsurance, she said.

“Property continues to grow but at a slower pace in competitive U.S. segments. We expect top line growth to continue as the impact of recent underwriting years and new entrants comes through, but this is not growth at any cost,” she emphasized.

“Many in the market are exercising caution, leaning into areas where margins are strong and pulling back where conditions no longer support the original plan,” Cliff said.

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