Lloyds Financial Rating upgraded by Standard & Poor's

Standard & Poor’s (S&P), the credit rating agency, has recently reported on the Lloyd’s of London insurance market and upgraded its financial strength rating (FSR) to AA- from A+. It maintained the stable outlook. The detail of S&P’s review gives a positive indicator regarding the financial stability of Lloyd’s and provides further evidence of the attractive insurance market environment, in line with recent third quarter forecast results update. 

The upgrade in rating reflects the improvement in Lloyd’s balance sheet strength, which S&P assesses as “excellent”. S&P said the revision also reflected Lloyd’s very strong capital and solvency positions. This was evidenced by the profitable underwriting and investment performance, as well as strong premium growth, recorded in Lloyd’s half-year 2023 results.

Lloyd’s reported a combined ratio of 85.2 percent for the first six months of 2023, with an investment rebound helping the market deliver a pre-tax profit of £3.9 billion. A combined ratio is an indication of an insurance entity’s underwriting profitable. It shows claims and expenses as a proportion of premiums. A ratio of less than 100% shows that the organisation is making money out of its underwriting operations. 

Burkhard Keese, Lloyd’s CFO, said “This latest upgrade reinforces Lloyd’s financial strength and resilience, and is a welcome testament to the progress made in recent years to improve performance and strengthen Lloyd’s balance sheet.

“Financial strength ratings are vital indicators to our customers, our market, and our investors. This upgrade provides a renewed optimism that we will continue on our positive financial trajectory and deliver a strong financial outlook for 2023.”

Lloyd’s has ratings from a number of independent rating agents. Alongside, S&P it has ratings of A (excellent) from AM Best, AA- (very strong) from Fitch and AA- (very strong) from Kroll Bond Rating Agency. Full reports from the various rating agencies are available here.