-          Lloyd’s returned to profit in 2019, largely on the basis of strong investment returns.

-          The market response to the Covid-19 crisis is being overseen centrally. Lloyd’s will release a preliminary assessment of loss exposures in May.

-          Business continues, even though the market is operating remotely.

-          Reserve releases at a much lower level.

Lloyd’s released its results for the year ended 31 December 2019 on 26 March 2020. These are the aggregate results on a GAAP basis for all syndicates trading at Lloyd’s.  As a reminder, the GAAP account consolidates all movements in 2019, so is the sum of movements of the 2017 account in its third year, 2018 in its second year and the first year of 2019.

Lloyd’s moved back into profit in 2019, with an overall market profit of £2.5 billion (2018 was a loss of £1.0 billion) and an improved combined ratio of 102.1%, compared to 104.5% in 2018. The combined ratio is a quick indication of an insurance entity’s profitability expressing claims and expenses as a percentage of premium income. A number lower than 100% indicates that the insurer is making an underwriting profit. Although there was a small underwriting loss, the overall result was a respectable profit with the key contributor being the investment result. The investment return at 4.8% compared to the poor return in 2018 of just 0.7%.

Results at a glance





Year on Year change

Gross written premium




Gross claims paid




Combined operating ratio



2.4 points better

Pre-tax result

£2,532m profit

£1,001m loss


Investment return £




Investment return % 




Return on capital





At line of business level, there were small profits emanating from the property, energy and motor divisions, offset by losses in reinsurance, casualty and marine, aviation and transport.

Lloyd’s has launched Blueprint One, which describes several facets of the future at Lloyd’s including electronic trading platforms, more efficient claims processing, new ways to enter the market and improving the culture of the market. One the central aims of Blueprint One is a reduction in the expense ratio of the market. This improved marginally in 2019, with the operating ratio (acquisition costs such as brokerage and commissions and administrative expenses as a proportion of premium income) reducing from 39.2% to 38.7%


As regards the 2019 results, Covid-19 represents a post balance sheet event. There are uncertainties to both sides of the balance sheet. Although the vast majority of syndicate investments are in short dated high quality government and corporate bonds, with only very limited exposure to equity investments, there is a great deal of volatility in all financial assets in the current climate. A range of classes have loss exposure to the Covid-19 outbreak, including many types of liability policy, the contingency markets, travel and trade credit.

Lloyd’s has asked the market to respond to a major loss return, with managing agents calculating their exposures based on events to date, as well as making a forecast on the continuation of the crisis. Lloyd’s does not expect to be in a position to give an indication of market exposure to the outbreak until the end of May.


The release from old years was smaller than for a number of years, representing a contribution of 0.9 percentage points to the combined ratio, compared to a contribution of 3.9 percentage points in 2019. The smaller release was in part due to deterioration in the loss estimates for 2018’s Typhoon Jebi in Japan. Lloyd’s is confident of the reserves held by syndicates.  93% of syndicates hold reserves in excess of independent actuarial best estimates and for the first time, Lloyd’s has an overall actuarial assessment of reserves, which also shows a margin of held reserves over best estimates.


Lloyd’s has now reported nine consecutive quarter of rate improvement. Lloyd’s CEO John Neal stated that 53 of 61 subsectors of business classes have reported rate improvement in 2019, with improvements in every territory. Rate increases continue into 2020, although it is too early to assess the impact on premium volumes for the rest of this year of the slowdown in economic activity which will follow the shutdowns and lockdowns of businesses due to Covid-19.

The full results statement can be found here and the analysts’ presentation slides here.