The Lloyd’s insurance and reinsurance market has announced a $2.3 billion net loss estimate for the Los Angeles wildfires, as the market reports another solid year of underwriting profit and premium growth.Lloyd’s is scheduled to release its results for full-year 2024 on March 20th, but has today reported some preliminary figures alongside its January 2025 California wildfire loss estimate.“Whilst not included in the FY24 result, based on the information currently available, we estimate the net loss to the market for the Californian wildfires to be approximately $2.3bn,” Lloyd’s commented.Burkhard Keese, Lloyd’s Chief Financial Officer (CFO), said, “We would like to extend our deepest sympathies to those affected by the California fires earlier this year.

Although we are still assessing the full impact, we do not expect this to be a capital event.” Industry loss estimates for the wildfires are currently sitting around $40 billion, however some have suggested a total loss that sits closer to $50 billion.Switching attention to the preliminary results announced by Lloyd’s, underwriting profit is expected to be £5.3 billion for 2024, which while very strong , it is down on 2023’s £5.9 billion, while profit before tax is expected to fall from £10.7 billion to £9.6 billion in 2024.At the same time, Lloyd’s has reported that gross written premiums (GWP) increased 6.5% year on year to £55.5 billion in 2024, reflecting 8.5% growth, mostly in the property and reinsurance segments which Lloyd’s notes had a “strong underwriting performance in the year,” with a 0.3% price change and FX movements of -2.3%.

Furthermore, the Lloyd’s market combined ratio increased by 2.9 percentage points to 86.9% in 2024, which according to Lloyd’s, was driven by major claims in the second half of the year.Excluding large loss events, the underlying combined ratio strengthened to 79.1% in 2024 from 80.5% in 2023.Moving towards the asset side of the balance sheet, Lloyd’s has reported a full year 2024 investment return of £4.9 billion, which is down from 2023’s £5.3 billion, with the market noting that the portfolio benefited from another year of high interest rates.

Keese added: “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.”.All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.

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