Reduced reliance on letters of credit (L/Cs) has contributed to strong earnings at Lloyd's of London in the first half of 2024 according to a report published by Moody's Ratings.

The ratings agency says it expects the global marketplace for insurance and reinsurance to sustain its performance by maintaining strong earnings and capital over the next 12-18 months.

L/C impact

"In recent years, the market has strengthened its capital through additional contributions from members and reduced reliance on L/Cs," according to Moody's report.

"We expect its capital to remain robust, capable of absorbing above normal catastrophe losses," it added.

Drivers of growth

Lloyd's reported a pre-tax profit of £4.9 billion (US$6.3 billion) for the first half of 2024, up from £3.9 billion in the same period in 2023.

This significant improvement is attributed to disciplined underwriting, premium growth, and a favourable claims environment.

Fewer catastrophes

Lloyd's achieved an underwriting profit of £3.1 billion, an increase from £2.5 billion in the first half of 2023.

The period experienced relatively few major catastrophes, contributing to the strong underwriting results.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.