Lloyd's market messages, 28 November 2024

Lloyd’s held its quarterly briefing to the market on 28 November. Chief of Markets, Patrick Tiernan, gave some thoughts on the current trading conditions and outlook as well as an indication of Lloyd’s overall exposures to losses arising out of hurricanes Helene and Milton. These are projected to be between $1.8 billion and £3.4 billion. Tiernan said he would expect that the higher end of this range is far too pessimistic and that he believes the final outcome will be close to the bottom of the range.  He spoke of some areas of concerns, as Lloyd’s looks to maintain profitability and growth in what remain generally favourable conditions. These concerns include property insurance where rate increases had begun to moderate before the hurricanes reversed some trends, and casualty, where it is evident that inflation is increasing claims’ settlement costs on older years.

In aggregate syndicates are projecting growth of around 11% for 2025 over the most recent reforecasts for 2024. Exposure growth accounts for five percentage points, inflation for 4 points, with new syndicates increasing the premium base by two points.

Delegated authority business, which accounts for around two fifths of market premium will be a particular area of focus in 2025, with Lloyd’s looking to syndicates to exhibit appropriate controls and oversight of those coverholders writing business on their behalf.

Emma Stewart, Chief Actuary, spoke on capital and reserving, explaining the increase in capital requirements to be in line with increased exposure. She also looked at developments in reserving in US General liability. Lloyd’s, with its annual review via the reinsurance to close cycle and healthy margins over actuarial estimates, has robust processes in place.

Finally, Peter Montanaro, Market Oversight Director, outlined key themes in oversight for 2025.

The full presentation can be seen here (via youtube),