1. Market evolution drives growth
The Lloyd’s of London marketplace – which accounts for around 10% of global insurance and reinsurance businessi – has begun a modernisation of the market and placed an increased emphasis on underwriting discipline. It’s a notable change of direction, given that for some years, the marketplace was perceived to be falling behind jurisdictions with lighter-touch regulation and a more agile approach to innovation, technology and bureaucracy.
These efforts appear to be delivering growth and bolstering financial strength. Gross written premium rose to £32.5 billion in the first half of 2025 from £30.6 billion a year earlier while return on capital reached 20.7% according to Lloyd’s HY2025 results. Benign underwriting conditions and price increases in 2023 and 2024, particularly in the property-catastrophe market, also provided a valuable tailwind.
While Lloyd’s marketplace performance has improved and the market is growing, this has been accompanied by restraint among market participants. In previous market cycles favourable conditions led to a flood of capital that ultimately pushed down prices and created a soft insurance market. However, while softer compared to the highs of 2023 and 2024, rates during 2025 have been considered adequate in most classes, although further declines are expected for 2026.
Not all capital entering the Lloyd’s marketplace is aimed at expanding existing underwriting capacity. Much of it supports the transfer of risk into Lloyd’s or meets rising demand in areas such as cyber, where premiums are growing faster than inflation. These dynamics help balance supply and demand rather than drive prices down.
Although modernisation is welcomed, there is also broad support to retain the characteristics that make Lloyd’s distinctive, including its syndicate model. This model allows diverse underwriting views to coexist and enables the separation of underwriting from capital provision. As a result, third-party investors can access returns without managing underwriters directly, making it easier to scale business and diversify risk.
