Underwriting discipline will remain a focus at Lloyd’s after profitability deteriorated last year, according to an annual note from Chairman John Nelson and CEO Inga Beale.

“Barring any major catastrophe claims in the next two weeks, the market will have shown a strong performance, despite the tough operating environment,” they write in the mid-December message.

“However, the strength of these results masks a deteriorating and worrying trend: that current-year underwriting is not profitable in aggregate at the moment.

“This is a matter of great concern to us.”

Prudent underwriting discipline was a focus during a mid-year portfolio review, before business plans were signed off.

“We anticipate that the need for continuing review of underwriting plans will be necessary throughout 2017,” Mr Nelson and Dame Inga say.

A Lloyd’s reinsurance branch in India is expected to be fully operational this year, while talks with Malaysian regulators over an onshore Tier 1 reinsurance licence are advanced.

Lloyd’s is also moving ahead with alternative trading plans to ensure business is not disrupted by Britain’s vote to leave the European Union, with details expected to be released early this year.

Mr Nelson and Dame Inga say progress on the Target Operating Model modernisation program stepped up last year and adoption of the PPL electronic placing platform bodes well for the addition of marine and property early this year.

Lloyd’s says it is reducing market subscriptions by 10% this year.

“Throughout all the challenges in 2016, the strength of Lloyd’s financial position has continued to improve, with ratings at an all-time high,” the note says.