Lloyd’s says major claims dented earnings last year and it expects them to fall compared with 2023.

In a trading update overnight, the market flagged an underwriting profit of £5.3 billion ($10.85 billion) and pre-tax profit of £9.6 billion ($19.64 billion) – down from £5.9 billion ($12.07 billion) and £10.7 billion ($21.9 billion) respectively the previous year.

It says the combined ratio is likely to worsen to 86.9% from 84% due to “major claims in the second half of the year”.

Lloyd’s defines major claims as loss events above £20 million ($40.93 million) in a reporting period.

Excluding large losses, the underlying combined ratio was 79.1%, an improvement on 80.5% in 2023.

Gross written premium rose 6.5% to £55.5 billion ($113.57 billion), which Lloyd’s says reflects growth “primarily in the property and reinsurance segments, which had a strong underwriting performance”.

Lloyd’s says information at hand indicates the California wildfires in January will incur a net loss of about £2.3 billion ($4.7 billion).

The market will release its 2024 results on March 20.

From the latest Insurance News magazine: Remarkable aerial images show the devastation inflicted on LA's suburbs by the January wildfires. Could the same fate befall Australian cities?