Hard market warning following strong 2023 for London market

Most insurance bosses believe that the hard market is coming to an end following a strong 2023 for the Lloyd’s and London market, according to a new report by Oxbow Partners.

Published today (24 October 2024), the report, entitled CEO Agenda 2025, showed the market achieved a gross written premium (GWP) of £52bn, while the combined ratio dropped to 84%.

And over 70% of syndicates, accounting for more than 80% of Lloyd’s GWP, were profitable and growing.

However, the report claimed that while the 2024 underwriting year is also expected to do well, there was an emerging consensus among chief executives that this year would be the “late afternoon” of the hard market.

“What goes up must surely come down,” the report added.

Avoiding big swings

At the same time, however, bosses also believe that the market can behave differently and avoid the big swings of the past.

“Carriers have much richer data and insights than even five years ago,” the report said.

“This will allow them to have a more granular view of profitability and should protect against irrational pricing changes.”

It also stressed that “companies need to have a strong house view on how market bifurcation will play out and where they want to play in the market”.

The report continued: “This should then seed a strategy about where to lead and follow and how to play in different channels. They should also consider the impact that differential pricing across the slip would have on this strategy.

“Companies then need to review their operating model and build a platform that allows them to win with their chosen models.”