Lloyd's of London sees H1 profits decline as bond yields climb

(Sharecast News) - Lloyd's of London reported a decline in first-half profit on Thursday despite higher premiums and an improved underwriting result, as weaker investment returns weighed on earnings.

The global specialist insurance marketplace said pre-tax profit for the six months to 30 June fell to £3.5bn from £4.2bn a year earlier.

The result came even as gross written premiums increased 6.9% to £34.7bn from £32.5bn, driven by volume growth of 15.8% from new and existing syndicates.

The bottom-line decline reflected a sharp fall in investment returns, which dropped to £1.8bn, or 1.6%, from £3.2bn, or 3.1%, in the first half of 2025.

Lloyd's said the investment result included strong income and realised gains, but was hit by unrealised losses on fixed-income assets as bond yields widened.

Geopolitical tensions and inflationary pressures pushed yields higher during the period, reducing the market value of existing bonds. This was partially offset by stronger equity markets.

Underlying insurance performance improved, with underwriting profit rising to £1.9bn from £1.5bn and the combined ratio improving to 90.8% from 92.5%, helped by a lower level of major catastrophe claims.

However, the underlying combined ratio worsened to 84.0% from 82.1% as risk-adjusted pricing declined amid a more competitive market.

Chief executive Patrick Tiernan said: "The syndicates operating in the Lloyd's market delivered a solid aggregate set of results for the six months ended 30 June 2026.

"But performance and high risk are far from mutually exclusive. Underwriting discipline and innovation are the keys to maintaining outperformance and quality of earnings."

Lloyd's said the first-half performance left the market on track to deliver the full-year guidance issued in March.