Lloyd's London interim profit falls but backs annual outlook

Lloyd's of London on Thursday reported lower profit for the first half of 2026 as investment returns were hit by unrealised losses on fixed-income assets stemming from widening bond yields.

The London-based insurance and reinsurance market reported pretax profit for the six months ended June 30 of £3.54 billion, down 17% from £4.25 billion a year ago.

Hurting profit, its investment return fell to £1.80 billion from £3.17 billion. Lloyd's said it was hurt by unrealised fixed income losses, as bond yields widened.

Gross written premiums rose 6.9% to £34.71 billion from £32.47 billion, driven by growth from new business and new entrants to the market, Lloyd's said.

The combined ratio improved to 91.0% from 93.0%. Underwriting profit shot up to £1.92 billion from £1.51 billion.

The risk backdrop is "more complex", Lloyd's said.

"Notwithstanding the current El Nino conditions and lower predictions for the North Atlantic hurricane season, the underlying pressures on physical infrastructure continue to build," Lloyd's said.

Lloyd's said its strategy, launched in March, is focused on improving underwriting performance, creating a more efficient and flexible marketplace, maximising its capital advantage and building a stronger market.

The strategy aims to reduce costs and friction, improve flexibility, modernise technology and data, and build capabilities for future innovation. Lloyd's said it remains on track to deliver its full-year guidance.

Chief Executive Patrick Tiernan said: "This is a solid start to the year. But strong performance and high risk are far from mutually exclusive. From a pricing and risk environment perspective, we see the outlook weighted to the downside from this current high point in performance.

"Underwriting discipline and innovation are the keys to maintaining outperformance and quality of earnings."

Lloyd's maintained its full-year guidance for gross written premiums of £64 billion, plus or minus 5%, and a combined ratio of between 90.0% and 95.0%.

Looking to 2027, Tiernan said Lloyd's should not expect growth in core markets as underwriting conditions become more challenging.

"Our priority must be to protect underwriting quality and sustainable returns," he said.

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