Rate adequacy will be a dominant theme this year but talk of “inevitable cycle turns” is simplistic, Lloyd’s chief of markets Patrick Tiernan told an annual results briefing.

The market anticipates gross written premium this year of £60 billion ($123.5 billion), plus or minus 5%, after it rose 6.5% to £55.5 billion ($114.6 billion) in 2024.

“Talk of inevitable cycle turns is, in my view, simplistic. It misses class-level dynamics and it obfuscates the more interesting and structural trends in the market today, on which we’ve got a focus,” Mr Tiernan said.

Major themes for this year and next are expected to be rate adequacy by line of business, control of distribution, growth-driven consolidation and capital innovation, he says.

Lloyd’s, which released preliminary figures earlier this month, confirmed underwriting profit last year eased to £5.3 billion ($10.9 billion) from £5.9 billion ($12.1 billion) in 2023, and pre-tax profit was £9.6 billion ($19.7 billion) compared with £10.7 billion ($22 billion) a year earlier.

The combined operating ratio moved to 86.9% from 84% as events including hurricanes Milton and Helene, and the Baltimore bridge collapse contributed to an increase in the major claims ratio.

The underlying combined operating ratio excluding large losses was 79.1%, an improvement on 80.5%.

CEO John Neal says the GWP increase was driven by a blend of 8.5% volume growth and 0.3% price increases, excluding adverse foreign exchange movements.

“Broadly, property classes remained well priced. However, some casualty classes continued to need focus, alongside specialty lines impacted by increased economic and geopolitical risks,” he said.

“These conditions saw appropriate underwriting actions taken by the market in selecting and pricing risks, and prudent reserving for complex cases.” 

Lloyd’s will soon undergo a leadership change, with Charles Roxburgh to take over from Bruce Carnegie-Brown as chairman from May 1. Deputy CFO Alexandra Cliff will take over the CFO role from Burkhard Keese the same month.

Mr Neal announced in January that he will step down this year at a date to be confirmed. A new CEO is yet to be announced.