Lloyd's of London estimates $2.3bn market loss from Californian wildfires

(Sharecast News) - Lloyd's of London has pencilled in a $2.3bn (£1.8bn) net loss to the insurance market from the Californian wildfires but says it is still too early to give an accurate prediction. "Although we are still assessing the full impact, we do not expect this to be a capital event," said Burkhard Keese, Lloyd's chief financial officer.

The prediction came as the insurance and reinsurance marketplace published its preliminary results for 2024, in which it reported a 6.5% increase in gross written premiums to £55.5bn.

That reflected 8.5% operational growth, primarily in the property and reinsurance segments which had a strong underwriting performance in the year, and a 0.3% positive impact from pricing, slightly offset by a 2.3% hit from FX movements.

The average combined ratio of the market - a key insurance indicator where a number below 100% reflects underwriting profitability - was 86.9%, up from 84.0% in 2023, which was driven by a number of major claims in the second half. However, excluding large losses, the underlying combined ratio fell to 79.1% from 80.5%.

Lloyd's reported a pre-tax profit for the year of £9.6bn, down from £10.7bn previously.

"2024 saw us maintain our focus on strong profitability and disciplined growth. Our market has delivered another excellent underwriting year for our investors, while providing best in class solutions for our customers to protect their business flows and balance sheets," Keese said.