FinancialLines
Premiums
Third year of rate reductions
Focus on differentiated offerings
Lloyd’s share continues to grow
Premiums declined for the third consecutive year, dropping to ~$4.0b in FY25 and bringing the total premium pool to a similar level to FY21. Rate softening was widespread across Professional Indemnity (PI) and Directors and Officers (D&O), with PI rates now at their lowest since FY16.
Claims
Lower claim frequency, but higher sizes
Class actions continue
Emerging sources of claims (ESG, cyber, privacy, AI)
Gross loss ratio rose to 51% in FY25, though net loss ratios remained stable. Favourable claims experience and significant reserve releases from post-COVID-19 years helped offset older notification year strains. Persistently low claim frequency has supported results, but inflationary pressures on legal costs are emerging.
similar to FY24
Profitability
Fourth consecutive year of profitability
Supported by reserve releases
Rate reductions worsening underlying COR
Financial Lines remained profitable in FY25, with a reported COR of 94%, slightly better than target. Strong claims performance and reserve releases supported results despite falling premiums impacting the underlying profitability.
1 point better than FY24
FY26 Outlook
We expect Financial Lines profitability to decline in FY26, and drop below target return levels. Rate reductions and inflationary pressures are eroding margins, and emerging risks — including ESG, AI, and regulatory scrutiny — may drive future claims, and current profitability may not be sustained.
Meet the contributors
Gokul Chandrasekaran
Financial Lines
Callan Jones
Financial Lines
Melody Yue
Financial Lines