Lloyd’s of London chief of market performance Rachel Turk (pictured) has warned underwriters to prepare for deteriorating market conditions as insurance rates soften faster than expected across key lines, including casualty and cyber.
Speaking in a webcast, Turk said Lloyd’s underwriters must manage the “inevitable slide toward the softest part of the underwriting cycle.” The market’s full-year forecast after the third quarter shows a 1.5% decline in premiums amid weaker rate changes.
Casualty rates have moved into negative territory, with a risk-adjusted rate change of 1%, which Turk described as likely insufficient given persistent social inflation. She noted that while Lloyd’s has implemented reduced limits and higher attachment points to mitigate reserve strengthening issues seen elsewhere in the market, the casualty tail remains long and price adequacy questionable.
Cyber insurance continues to struggle with supply and demand imbalances, Turk said. “Anticipated growth for new buyers in cyber isn’t coming through as the market continues to chase the same pool,” she said, as reported by Best Wire. She added that the dynamic and evolving risk landscape means underwriters’ views on adequacy may always be too optimistic and out of date despite continuous model updates.
In property lines, Turk said the pace of rate decreases, rather than the amount, was particularly concerning. Rate pressure is likely to accelerate given recent market results and the relatively light North Atlantic hurricane season.
“Rate declines on margin and maintaining top-line aspirations amid less-than-ideal market conditions are unlikely to remain unchallenged,” Turk said.
Turk emphasised that 2025 represents “the battle for distribution” in which Lloyd’s holds an advantage, though she cautioned this should not be taken for granted. She said facilities require deliberate and measured cross-class oversight, warning that Lloyd’s will appear intrusive because “the implications are too great to back off and hope for the best.”
Looking to 2026, Lloyd’s anticipates £67.4 billion ($89.07 billion) of gross written premiums and a net combined ratio of 91.2. The majority of expected growth will come from new entrants and structured solutions, Turk said. The anticipated 2025 figures are £61.9 billion of gross written premiums and a combined ratio of 89.7.
