Lloyd’s explained that its investment returns of £1.8bn, down from £3.2bn, were hit by unrealised fixed income losses as yields widened on geopolitical and inflationary pressure resulting in the decrease, but the unrealised losses do not affect its claims-paying capacity or solvency position, which remains strong.

It recorded an increase in gross written premiums to £34.7bn up 6.9%, driven by growth from existing and new syndicates, despite a more competitive pricing environment. The group also recorded an underwriting profit of £1.9bn and a combined ratio of 90.8%, an improvement of 2.5 percentage points for the same period in 2025. 

The insurance and reinsurance marketplace revealed that across the first half of 2026, risk-adjusted rates fell 6.7% across its market, compared with the same period in 2025 when it was 3.5%, revealing that the pace of softening almost doubled year-on-year. The GWP increase was driven by a 15% volume growth.

Lloyd’s own underlying combined ratio increased from 82.1% in the first half of 2025 to 84% in the first half of 2026, revealing where the market’s technical performance is heading for brokers. Underlying underwriting performance is softening even as headline profit and premium figures grow.

The Lloyd’s market continues to be strong with total capital, reserves and subordinated loan notes of £48.4bn at June 30, 2026 down from £49.8bn at the 2025 year-end.

Underlying capital generation in the first half of the year was offset by the return of capital to members, reflecting the strong performance of the closing underwriting year of account.

The Lloyd’s central and market-wide solvency ratios remained strong at 30 June 2026. The central solvency ratio increased to 503% (FY 2025: 496%), while the market-wide solvency ratio was stable at 199% (FY 2025: 200%).

Capital generation from underwriting and investment performance was partially offset by a higher solvency capital requirement, largely attributable to
the strengthening of US dollar spot rates against sterling during the period, and by the release of surplus capital to members.

Lloyd’s revealed it turned away £5.1bn worth of business in the 2025 financial year. Patrick Tiernan, chief executive of Lloyd’s of London, explained: “As the pricing cycle softens, we are becoming increasingly selective about business entering the market. As ever, all applications are assessed against our combined ratio and return on capital requirements.”

It revealed that only about 20% of the applications received by third-party managing agents are passed on to Lloyd’s.

Mr Tiernan said: “The market has produced a solid result for members over the first half of the year, our outlook for 2026 is unchanged and the pipeline of high-quality underwriting talent looking to join Lloyd’s remains strong.

“However, the 2027 planning season will be different. As the underwriting conditions become more challenging, we should not expect growth in core markets. Our priority must be to protect underwriting quality and sustainable returns.

“That makes innovation more important, not less. If growth in established areas becomes harder to justify, we need to be better and faster at finding the risks where Lloyd’s expertise and capital can make a genuine difference.  We need to create new opportunities rather than lower our standards to pursue old ones.”