Lloyd's of London, the world's leading insurance and reinsurance marketplace, reported a decline in first-half profit as turbulence in bond markets weighed on its investment performance.

The market's pre-tax profit fell 16.7 per cent to £3.5bn for the first six months of 2026.

Gross written premiums rose 6.9 per cent to £34.7bn, up from £32.5bn a year earlier. The growth was driven by a 15.8 per cent jump in volume from new and existing syndicates, which offset a 6.7 per cent decline in market-wide prices. The pricing decline reflects a broader softening in commercial insurance and reinsurance rates, as abundant capital in the sector has led insurers to compete more aggressively on price after several years of strong returns following costly natural catastrophe years earlier in the decade.

Lloyd's said the drop in its bottom line was largely due to investment returns falling to £1.8bn, adding that geopolitical tensions and inflationary pressures had hurt its bond assets despite a strong performance in equities. Insurers like Lloyd's, which hold large portfolios of bonds to back future claims payments, are particularly sensitive to swings in fixed-income markets.

Excluding the investment turbulence, Lloyd's core business improved, with the market reporting an underwriting result of £1.9bn, up from £1.5bn. Its headline combined ratio, a key measure of insurance profitability, improved to 90.8 per cent — meaning it kept roughly 9 pence of profit for every pound of premium after claims and costs — helped largely by a quiet six months for major natural disasters.

Chief executive Patrick Tiernan backed the "solid aggregate set of results," telling the market that "underwriting discipline and innovation are the keys to maintaining outperformance."

Marketplace focuses on four-point strategy

Lloyd's confirmed it remains firmly on track to deliver against the targets set out in March, when it posted a pre-tax profit of £10.6bn for 2025.

The marketplace doubled down on a four-point growth plan Tiernan unveiled earlier this year, focused on underwriting excellence, operational efficiency, capital optimisation, and staff retention. Speaking at the time, Tiernan said: "This is how we will advance and protect Lloyd's as the pre-eminent global marketplace for insurance risk."

In July, Lloyd's of London released an independent legal review into former chief executive John Neal, which found that he fell "significantly below" expected standards in his workplace relationship with a colleague.