Lloyd’s pegs LA wildfire loss at $2.3bn as FY’24 GWP rises 6.5%

The specialist Lloyd’s insurance and reinsurance marketplace has announced a net loss estimate of around $2.3 billion for the Los Angeles, California wildfires, as the market reports another strong year of underwriting profit and top-line growth.

Lloyd’s is scheduled to release its full year 2024 results on March 20th but has today reported some preliminary figures alongside its January 2025 California wildfire loss for the market.

“Whilst not included in the FY24 result, based on the information currently available, we estimate the net loss to the market for the Californian wildfires to be approximately $2.3bn,” Lloyd’s has revealed.

“We would like to extend our deepest sympathies to those affected by the California fires earlier this year. Although we are still assessing the full impact, we do not expect this to be a capital event,” said Burkhard Keese, Lloyd’s Chief Financial Officer (CFO).

Currently, industry loss estimates for the wildfires are merging around the $40 billion mark, although some have suggested a total loss closer to $50 billion. Either way, it’s the costliest wildfire event in U.S. history and one of the most expensive natural catastrophe loss events ever for insurers and reinsurers.

Turning to the preliminary results announced by Lloyd’s, underwriting profit is expected to be £5.3 billion for 2024, which is very strong albeit down on 2023’s £5.9 billion, while profit before tax is poised to fall from £10.7 billion to £9.6 billion in 2024.

Lloyd’s has reported that gross written premiums (GWP) increased 6.5% year on year to £55.5 billion in 2024, reflecting 8.5% growth, mostly in the property and reinsurance segments which Lloyd’s says had a strong underwriting performance in the year, with a 0.3% price change and FX movements of -2.3%.

The Lloyd’s market combined ratio increased by 2.9 percentage points to a still healthy 86.9% in 2024, driven by major claims in the second half of the year. Excluding large loss events, the underlying combined ratio strengthened to 79.1% in 2024 from 80.5% in 2023.

The attritional loss ratio also improved to 47.1% in 2024 from 48.3% in the prior year, reflecting continued underwriting discipline. The expense ratio was flat for the year at 34.4%.

On the asset side of the balance sheet, Lloyd’s has reported a full year 2024 investment return of £4.9 billion, down on 2023’s £5.3 billion, with the market highlighting that the portfolio benefited from another year of high interest rates.

“2024 saw us maintain our focus on strong profitability and disciplined growth. Our market has delivered another excellent underwriting year for our investors, while providing best in class solutions for our customers to protect their business flows and balance sheets,” said Keese.

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