Lloyds of London Reports £2 Point Three Billion Loss From Californian Wildfires

Lloyd’s of London has announced that Californian wildfires last year generated a market-wide loss of approximately $2.3 billion (£1.9 billion), according to its preliminary 2024 results. While this has impacted the insurance market’s 2024 profits, the group remains stable due to disciplined operations and strong premium growth.

The specialist insurance firm saw its gross written premiums rise by 6.5 per cent, reaching £55.5 billion for the year. A strong performance in the property and reinsurance sectors drove this growth, even as the group’s profit before tax fell from £10.7 billion in 2023 to £9.6 billion in 2024. The combined ratio, an indicator of profitability where a figure below 100 per cent represents an underwriting profit, increased by two percentage points year-on-year to 86.9 per cent.

Underwriting profit stood at £5.3 billion, a slight decline from £5.9 billion in 2023, but significantly better than the £2.6 billion reported in 2022. Lloyd’s described the 2023 results as its best in recent history, highlighting that the group continues to perform strongly despite substantial claims. The CFO, Burkhard Keese, noted that while the Californian wildfires will affect profits, they are not considered a “capital event,” meaning the losses are manageable and won’t impact the market’s broader capital position.

Lloyd’s investment return also contributed positively to its performance, achieving £4.9 billion in 2024, compared to £5.3 billion in the previous year. Benefiting from a high-interest rate environment, the group’s investment portfolio offset some of the volatility seen in the markets during the final quarter of the year.

Lloyd’s continues to maintain its standing as a leader in providing coverage ranging from natural disasters to cyber threats, satellite launches, and terrorism. Established in the 17th century, the market remains pivotal in protecting businesses globally. Despite the challenges posed by catastrophic events such as the Californian wildfires, the market’s disciplined approach leaves it well-positioned for continued growth. Full 2024 results and projections for 2025 are expected to be published next week.