Lloyd’s reports £3.5 bn profit as premiums rise in 1H 2026

• Lloyd’s gross written premium rose 6.9% to £34.7 bn in 1H 2026, while underwriting profit increased to £1.9 bn from £1.5 bn.
• The combined ratio improved to 90.8% from 92.5%, helped by a lower major claims ratio of 6.8% and 3.5 percentage points of prior-year reserve releases.
• Profit before tax fell to £3.5 bn from £4.2 bn as investment returns dropped to £1.8 bn, while capital remained strong with a 503% central solvency ratio.

Lloyd’s reported gross written premium of £34.7 bn for the first half of 2026, up from £32.5 bn a year earlier. The market also improved its combined ratio to 90.8% from 92.5% and said performance remains consistent with its full-year guidance.

Underwriting profit increased to £1.9 bn from £1.5 bn in 1H 2025. Profit before tax fell to £3.5 bn from £4.2 bn as investment returns declined.

Investment income reached £1.8 bn, equal to a 1.6% return. Lloyd’s generated £3.2 bn, or 3.1%, during the same period last year.

Total capital, reserves and subordinated loan notes stood at £48.4 bn at June 30, compared with £49.8 bn at the end of 2025. Return on capital reached 21.6%, slightly below the 22% reported for full-year 2025.

Key financial highlights of the year

The central solvency coverage ratio increased to 503% from 496%. Market-wide solvency coverage remained broadly unchanged at 199%, compared with 200% at the end of 2025.

Patrick Tiernan, Chief Executive of Lloyd’s, said syndicates delivered a strong aggregate result during the six months ended June 30. He added that high-risk business still requires disciplined underwriting and continued investment in new capabilities.

Gross written premium increased 6.9% year over year, supported by 15.8% volume growth across new and existing syndicates. Volume growth had reached 11.9% in the first half of 2025.

Pricing moved in the opposite direction. Market-wide rate changes were negative 6.7%, compared with negative 3.5% a year earlier, as competition intensified across several classes.

Total capital, reserves and subordinated loan notes

Foreign exchange also reduced reported premium growth. Sterling strengthened against the US dollar, creating a negative 2.2% currency effect, matching the movement recorded in 1H 2025.

The improvement in underwriting profit came with fewer major catastrophe losses. Lloyd’s reported a major claims ratio of 6.8%, down from 10.4% in the prior-year period.

A separate combined-ratio measure rose to 84.0% from 82.1%, consistent with lower risk-adjusted pricing. That movement suggests softer market conditions are starting to put more pressure on attritional underwriting performance.

Prior-year reserve releases improved the reported combined ratio by 3.5 percentage points, compared with a 2.0-point benefit in 1H 2025. Favorable reserve development across several classes supported the result.

Those gains were partly offset by additional reserves for the Baltimore Bridge loss and revised estimates related to Ukraine. The expense ratio also increased to 36.4% from 35.8%.

Higher acquisition costs contributed to the increase. Profit-related commissions also rose as syndicates generated stronger underwriting earnings.

Lloyd’s investment portfolio produced £1.8 bn during the first half, supported by income and realized gains. Unrealized losses reduced the result as bond markets faced pressure from wider yields.

Geopolitical tensions and renewed inflation concerns weighed on fixed-income assets during the period. Equity markets performed more strongly and offset part of those losses.

Lloyd’s continues to focus its investment portfolio on high-quality assets, liquidity and capital preservation. That approach remains central as market volatility increases and interest-rate expectations shift.

Capital generation during the first half remained positive, though member distributions reduced the reported capital base. Lloyd’s returned capital following strong performance from the closing underwriting year.

The market’s solvency ratios remained well above regulatory requirements. Lloyd’s also retained financial strength ratings of A+ from AM Best and AA- from Fitch Ratings, KBRA and S&P Global.

Lloyd’s strategy announced in March focuses on underwriting performance, marketplace efficiency and more flexible capital deployment. The programme also includes lower operating friction, modernised technology and wider use of data across the market.

Management plans to reduce costs while giving participants more flexibility in how they transact business. Lloyd’s also intends to continue developing technology and operating capabilities needed for future insurance products.

The first-half figures leave Lloyd’s on course to meet its previously announced 2026 guidance. Strong underwriting results and lower catastrophe losses supported earnings, while softer pricing and weaker investment returns created greater pressure elsewhere in the account.