Stamp capacity: Lloyd’s top quartile set to contract next year
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Stamp capacity: Lloyd’s top quartile set to contract next year

First-quartile 2023 performers will contract capacity by 5% in aggregate next year, according to our survey analysis.

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The top quartile of Lloyd’s syndicates ranked by combined ratio are set to shrink in aggregate between the 2024 and 2025 years of account, analysis of data collected in Insurance Insider’s latest annual stamp capacity survey shows.

This publication’s survey – which was published on Monday – revealed that the Lloyd’s market was set to grow 6% in total to around £56bn for 2025.

This is the lowest year-on-year increase reported in our survey since 2019.

Optimism on current trading conditions at Lloyd’s is measured: the market is notably softer than it was a couple of years ago, and inflation has eased significantly.

Our analysis shows that the identity of the market participants who are major contributors to its growth has also been shifting.

As a reminder, stamp capacity is the amount of sterling business a Lloyd’s syndicate is authorised to write in a given year of account (YOA). For the purposes of our survey it is calculated gross of reinsurance and net of brokerage.

During the market’s recent stretch of remediation, it was fairly easy to predict which syndicates would grow: opportunities tended to be afforded to syndicates reporting strong underwriting results, and few others.

But that pattern has changed.

It broke down in last year’s survey, when the market’s fourth quartile by prior-year combined ratio recorded the highest rate of annual capacity growth.

And that correlation between performance and growth has not returned this year: top-quartile performers by combined ratio in FY 2023 are set to contract their stamp capacity by 5% in aggregate in YOA 2025.

It is worth noting that the backward step from this cohort is accounted for in entirety by Beazley 3623’s de-emption of £1bn from 2024. However, the top quartile would still record the lowest rate of year-on-year growth – 5% – even if we were to exclude that syndicate.

Only six of the 17 syndicates in this cohort have pre-empted for 2025, with Blenheim 5886 (+31%) and Probitas 1492 (+41%) reporting the largest increases.

A number of the syndicates in the fourth quartile that have recorded significant growth are newer syndicates reaching maturity. Acrisure’s syndicate Flux 1985, for example, will increase its stamp capacity by £100mn to £227mn. It is understood that Flux has maintained its original capital partners, who are taking larger shares of the stamp capacity total.

Mid-sized syndicates take increased share of pie

Splitting active syndicates which responded to our survey into size cohorts – according to their 2024 YOA stamp – provides insight into another change in how the market is composed.

Grouping syndicates into large vehicles with over £800mn in stamp, medium-sized syndicates with £100mn-£800mn in stamp and small syndicates of under £100mn results in a breakdown of around 20 syndicates in each of the large and small categories, and around 40 in the mid-sized group.

As the table below indicates, the majority of the market’s £3bn capacity growth in absolute terms was attributable to the Lloyd’s “middle class” (based on their pre-1 January 2025 stamp capacity).

This cohort grew by £2.2bn in aggregate – dwarfing the £0.5bn sterling increase recorded by “large” syndicates, according to our classification.

Such a shift means that this group of the largest syndicates at Lloyd’s accounts for a diminishing share of the market’s aggregate capacity: 54% in 2025, down from 57% in 2024.

All of the analysis above excludes syndicates that did not respond to our survey. For non-responders, their capacity was assumed to remain flat for purposes of the aggregate volumes shown above. In this year’s edition of the survey, we received responses from syndicates that accounted for 88% of our aggregate estimate of stamp capacity for 2024.

It remains to be seen throughout 2025 how much of the committed stamp capacity syndicates choose to deploy.

Lloyd’s chief of markets Patrick Tiernan recently noted that Lloyd’s undershot 2024 planned gross premium by 5%, with projected top line for next year rising 11% on 4% expected inflation.

Click here to explore interactive tables of all stamp capacity data by syndicate and by managing agent.

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