AM Best, the credit rating agency, reports that Lloyd’s reinsurance business has seen substantial growth in recent years, with a five-year compound average growth rate of 9 percent.
In 2024, Lloyd’s reinsurance premiums rose by 8 percent, driven by strong growth in property and specialty lines, along with favourable risk-adjusted rate changes and low single-digit economic inflation.
AM Best notes that casualty reinsurance declined slightly in 2024, despite pricing improvements, due to ongoing performance pressures in that segment.
In its Best’s Market Segment Report, “Underwriting Cycle Management Becomes Crucial for Lloyd’s Amid Softening Market Conditions,” AM Best examines trends in the global reinsurance industry during the Rendez-Vous de Septembre in Monte Carlo.
AM Best also published related reports during August and September, including analyses of the world’s largest reinsurance groups and detailed reviews of insurance-linked securities, life and annuity, health, and regional reinsurance markets.
Reinsurance is Lloyd’s largest business segment, accounting for roughly one-third of its gross written premium in 2024.
AM Best states that the market wrote GBP 18.7 billion in inwards reinsurance business last year. Property reinsurance represents around half of Lloyd’s reinsurance portfolio, casualty about 30 percent, and specialty, which includes marine, aviation, and energy, approximately 20 percent.
The company highlights that growth in property and specialty lines contributed most to overall expansion, while casualty results were weaker due to prior underwriting challenges. Syndicates focused on renewing profitable accounts and ensuring adequate pricing. AM Best reports that Syndicate 4472, Liberty, recorded the largest volume of reinsurance premium in 2024, closely followed by Syndicate 1084, Chaucer.
AM Best emphasises that Lloyd’s relies heavily on brokers for distribution, particularly three major global brokers. Brokers play a key role in placing risks and providing access to regional markets.
While this approach allows broad distribution, AM Best notes that it also increases costs and exposes the market to competition primarily based on price. Individual syndicates are less significant for brokers compared with the market overall.
AM Best reports that after periods of underperformance before 2020, Lloyd’s syndicates implemented corrective measures under the close oversight of the Corporation of Lloyd’s. These measures contributed to improved underwriting performance from 2021 onwards. Market conditions strengthened further in 2023, helping the property and casualty segments achieve excellent combined ratios.
According to AM Best, property reinsurance rates remained stable in 2024, and results benefited from prior-year reserve releases linked to past catastrophe events such as Hurricanes Ian in 2022, Ida in 2021, and Typhoon Jebi in 2018.
Natural catastrophe activity increased compared with 2023 but remained within budget, allowing the property segment to report a combined ratio of 75 percent. Casualty reinsurance, however, experienced a rise in its combined ratio to 98 percent from 90 percent in 2023, partly due to adverse development on pre-2019 business.
Specialty reinsurance faced slower rate increases and continued losses, including the collision of the vessel Dali with the Francis Scott Key Bridge in Baltimore. AM Best also notes that prior-year losses in the Aviation line were affected by updates to Ukraine conflict-related estimates, pushing the combined ratio in that segment to 106 percent in 2024.
Overall, Lloyd’s reinsurance performance remained solid in 2024, with underwriting profits of GBP 1.7 billion and a combined ratio of 88 percent.
AM Best expects that 2025 results will be affected by natural catastrophe events, including California wildfires estimated at GBP 1.7 billion or USD 2.3 billion, which will consume approximately one-third of the market’s catastrophe allowance. The remainder of the hurricane season will also play a key role in determining profitability for the year.
“Although moderating in comparison to 2023, the overall performance of Lloyd’s reinsurance segment remained strong in 2024, with the market reporting healthy underwriting profits of GBP 1.7 billion and a combined ratio of 88%,” added Kanika Thukral, Associate Director, Analytics, AM Best, and one of the report’s authors.
“The reinsurance segment’s underwriting results for 2025 are expected to be impacted by the California wildfires, for which the estimated loss for the overall Lloyd’s market, including insurance, is approximately GBP 1.7 billion and is expected to consume a third of the total market’s 2025 natural catastrophe allowance.”
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