S&P upgrades Lloyd’s financial strength rating

Lloyd’s of London has revealed that its financial strength rating has been improved to AA– outlook stable from A+ outlook stable.

In a statement released earlier this week (13 December 2023), the marketplace said ratings agency Standard and Poor’s (S&P) made the upgrade following improvement in Lloyd’s balance sheet strength.

The S&P noted that another factor in the upgrade was Lloyd’s “very strong” capital and solvency positions.

Burkhard Keese, chief financial officer of Lloyd’s, said: “This latest upgrade reinforces Lloyd’s financial strength and resilience and is a welcome testament to the progress made in recent years to improve performance and strengthen Lloyd’s balance sheet.”

Underwriting

S&P also highlighted the corrective underwriting actions taken by Lloyd’s in recent years – focused on underwriting discipline through better oversight of syndicates – as a “key” reason for Lloyd’s improved performance.

This resulted in profitability in both underwriting and investments and strong premium growth.

According to the marketplace’s H1 2023 results, published earlier this year (7 September 2023), Lloyd’s announced a profit before tax result of £3.9bn for the first six months of 2023 – a significant year-on-year uplift from H1 2022’s loss of £1.8bn.

Its gross written premium (GWP) result also grew by 21.9% (£5.3bn) year-on-year to reach £29.3bn for the most recent period. 

Keese said: “Financial strength ratings are vital indicators to our customers, our market and our investors.

“This upgrade provides a renewed optimism that we will continue on our positive financial trajectory and deliver a strong financial outlook for 2023.”