Navigating M&A in the London Market
April 8, 2025
The London Market’s performance has made it an attractive option for investors. Lloyd’s has been delivering both growth and profitability in recent years, with underwriting profits of over £5bn in both 2023 and 2024, up from £2bn in 2022. The market’s combined operating ratio has been below 90% for the past two years and premium written through Lloyd’s has more than doubled since 2013.
Despite potential softer market conditions on the horizon, the fundamentals of the London Market remain strong. The market has been supported by significant rate improvements across many lines, resulting in strong growth in both premiums and earnings. Despite this performance, London Market players are still undervalued compared to other global peers, offering an attractive option for investors to gain access to specialty risks.
There are various options for participating in specialty risks through the London Market, ranging from passive investment through vehicles like London Bridge 2 to active participation in Lloyd’s syndicates.
We believe potential investors are looking for one or more of the following benefits of the London Market:
- Access to Lloyd’s distribution
- Access to capital efficiency
- Access to specialist underwriting
- Access to market growth
- Opportunity to drive efficiency savings
The sector has seen an increase in transactions in recent years but our analysis suggests that several Lloyd’s syndicates are potentially open to new ownership. Collectively these represent £11bn GWP, or 20% of the market. They have a weighted average combined operating ratio of 88% and an average compound annual growth rate of 9%. We group these potential investment options into five categories ranging from run-off to tech-led, each of which present different challenges and opportunities for potential investors.
About the authors
Paul De’Ath leads the Oxbow Partners Market Intelligence team. Prior to joining Oxbow Partners Paul spent nine years as an equity research analyst covering all aspects of insurance across the UK and Europe. He started his career as an accountant and also spent some time in industry at Standard Life.
Greg Brown is a Partner at Oxbow Partners. He advises insurers and brokers on strategic transformation topics. His clients include carriers and brokers in the Lloyd’s and London Market as well as US corporate and specialty. Greg is known for his commentary on strategy topics in the London Market including producing leading reports including Enhanced Underwriting and Lloyd’s and London Market CEO Agenda.
