The Lloyd’s market produced an excellent return on capital of above 20% for a third successive year in 2025, according to analysts at AM Best, with a profit before tax of GBP 10.6 billion and a return on capital of 22%, following a period of subdued overall earnings that were impacted by low interest rates, soft underwriting conditions, and catastrophic losses.
In 2023, a profit before tax (PBT) of GBP 10.7 billion was the market’s largest on record, closely followed by the GBP 10.6 billion and GBP 9.6 billion PBT reported in 2025 and 2024, respectively.
In each of the last five years, the market has generated an underwriting profit, and a cumulative underwriting result of GBP 20.8 billion between 2021 and 2025.
The report said, “The turnaround in Lloyd’s underwriting performance was achieved despite a prevailing volatile economic environment and geopolitical uncertainty, and with the continuing presence of major claims, albeit at a lower level most recently.”
Meanwhile, Lloyd’s combined ratio has been somewhat volatile over the longer term and exhibited a cyclical nature. Volatility has been driven by exposure to catastrophic events and heightened by underwriting pricing cycles, said AM Best.
However, despite these recent excellent results, the market’s longer-term 10-year average return on capital remains below 10%; due to exposure to periodic large losses, earnings volatility is an ever-present risk for the market. Underwriting activities have predominantly caused the market’s earnings volatility, the report also highlighted.
“However, depressed investment returns due to the prolonged low-interest rate environment following the 2008 Global Financial Crisis, and a sharp spike in rates triggering unrealised losses in 2022, have also materially impacted the markets’ overall earnings,” analysts explained.
According to the report, nine out of ten largest Syndicates in 2025 were already ranked among the top 10 largest in 2015. The market comprises over 100 Syndicates, and in 2025, the largest 10 accounted for 37% of the market’s overall gross written premium. Those ranked eleven to twenty accounted for 19%, with the remaining 44% distributed between approximately 90 individual Syndicates.
Further, the market’s top line has grown strongly over the past decade, with most Syndicates benefiting from a period of hard market conditions. The report explained that the proportion of the market’s premium represented by the 20 largest Syndicates has remained relatively stable, and consistently over 50%, throughout the period.
AM Best’s report added, “Looking at the split of business by class, the Lloyd’s market is well diversified. Approximately two-thirds of the market’s gross written premium is written on a direct basis, with the remainder represented by reinsurance. Strong growth in recent years has been witnessed across most business lines.”
Taking a look at business line performance, reinsurance written by Lloyd’s Syndicates is well diversified between property, casualty and specialty reinsurance lines, with the largest individual Syndicates writing over GBP 1 billion of reinsurance business in 2025.
Overall, Syndicates reported gross written premium (GWP) of GBP 20.2 billion for the inwards reinsurance segment in 2025, up 4% compared to the prior year. The inwards reinsurance segment reported by Syndicates has recently experienced strong growth, although growth rates are tapering in 2025.
Additionally, property business is the largest primary insurance line at Lloyd’s, written by most Syndicates, with the largest in 2025 being Tokio Marine Kiln, with over GBP 1 billion of GWP. In 2025, Syndicates wrote a total of GBP 14.3 billion of GWP in this line of business. In the past five years, the segment has reported significant growth in GWP, with a compound annual growth rate of 13%. However, growth stalled in 2025, with Syndicates reporting 2% less GWP compared to 2024, impacted by risk-adjusted rate decline and foreign exchange rate movements.
Despite reducing its casualty business at Lloyd’s in 2025, Beazley’s Syndicate 2623 remained the largest liability writer with GBP 761 million in GWP. Together, all Syndicates combined reported GBP 12.7 billion of GWP for the liability line in 2025. Despite strong growth and compounding rate increases, GWP growth for the segment has been inconsistent.
In 2025, for the Marine, Aviation and Energy segment, 21 Syndicates reported more than GBP 100 million each in GWP, led by Canopius with almost GBP 500 million in GWP. In 2025, the Syndicates together reported a total gross written premium of GBP 5.9 billion. After a period of stagnation, the line reported strong growth in recent years, with a 9% five-year compound average growth rate in GWP. The gross loss ratio has been volatile over the past decade, fluctuating between 48% (2015) and 74% (2017 and 2024).
Tim Prince, Director, Analytics, AM Best, and the report’s author, said, “The attritional loss ratio is a good indicator of the underlying market cycle, with peaks during the softest parts of the cycle. The 2025 year witnessed an increase in the expense and attritional loss ratios, tempered by a lower-than-average large loss experience and continued prior year reserve releases.
“AM Best expects that competitive pricing conditions are likely to put further upward pressure on the attritional loss ratio in 2026, and together with a normalisation of large loss experience during the year, could act to meaningfully increase the overall combined ratio.”
He further stated, “However, with the market’s combined ratio below 90% in 2025, there is room for it to deteriorate and remain within the target range of most market participants. With pricing pressure across many specialty lines of business, topline growth is expected to be subdued over the coming years.
“However, Lloyd’s remains an attractive place to operate and continues to draw new capital to the market, which could serve to offset the subdued organic growth if new operators target untapped segments. While premium rates appear broadly adequate, active cycle management will be top of the agenda for most senior management teams. The pace of market softening is something that will be closely monitored across the market.”
