Lloyd's Q1 2024 Market Message
Patrick Tiernan (Lloyd's Chief of Markets) delivered his Q1 2024 Market Message recently. Also speaking were the Director of Portfolio Management and Burkhard Keese. To watch the Market Message click here.
Patrick spoke about Lloyd's 2023 performance and outlook:-
"Risk + demand + underwriting opportunity co-existing in a rare harmony". The release of the market's preliminary 2023 numbers reaffirm the primacy of underwriting. They are one year's results though, so no complacency, instead a time for discipline and considered expansion.
The 2023 year's combined ratio was 84% - thanks to the Lloyd's portfolio being largely sheltered from the global insured losses of over US$100bn - and so the major loss ratio was at an eight-year low of 3.5% - compared to 12.7% last year.
US$52bn gross premium written, slightly behind the US$56bn expectation. Lower growth in some areas like cyber and market discipline caused this small shortfall.
The market’s underwriting profits more than doubled to £5.9bn in 2023 from £2.6bn in the previous year. The five-year average combined ratio is 96.4%. Lloyd's target cross-cycle combined ratio is sub-95%.
A concentration on underlying performance and disciplined growth will be maintained by Lloyd's in order to achieve the target combined ratio (irrespective of weather events) said Patrick. Whilst the Return on Capital for 2004-2016 was good at +14%...for 2017 - 2023 it was +3.6% which is inadequate.
Principal message themes:-
- We will not let go of performance at Lloyd’s for any reason
- Current super-cycle will endure
- Four additional peak perils to be monitored by the centre
- Growth must be disciplined
- Increased agility and transparency will be provided by the centre
Slides to accompany presentations available here
Disclaimer (Lloyd's) about the content of the Market Message available here