The challenges and risks to watch
Regulatory and compliance issues remain top concerns. “The 2024 UK budget has implications for inheritance tax planning, and clients will need to reassess their strategies,” Jackson explains. There is growing uncertainty over whether the tax advantages will continue to apply as favourably. This could impact estate planning strategies and make Lloyd’s participation less attractive purely from a tax mitigation perspective. Should government policy shift to tighten these rules, investors may need to explore alternative structures, accelerate succession, or reassess the financial viability of their existing inheritance tax strategy as a whole.
Geopolitical instability also poses risks. “Had the U.S. presidential election been closer, civil unrest could have impacted certain insurance portfolios,” he adds. Such global uncertainties make risk management an increasingly complex endeavour.
Lloyd’s also faces challenges in balancing innovation with financial sustainability. “The rapid development of cyber risks means syndicates must be cautious not to overexpose themselves,” warns Curtis.
What this means for investors
For businesses and private investors, these trends present an interesting case for engagement in the Lloyd’s market. “The business plans for 2025 offer some of the best return potential we've seen in a decade,” Jackson highlights.
Moreover, a growing number of investors are involving the next generation in their underwriting activities. “Twenty-five percent of our clients either have significant next-generation involvement or have already transitioned their participation,” Jackson shares. With potentially strong returns and inheritance tax benefits, structuring Lloyd’s participation as a multi-generational business is an increasingly attractive strategy for succession planning.
Conclusion
According to industry experts, the Lloyd’s market is poised for another strong year in 2025, despite global uncertainties. Opportunities in cyber insurance, inheritance tax planning, and the emergence of new syndicates create exciting growth prospects. However, investors must remain vigilant of regulatory shifts, geopolitical risks, and evolving compliance requirements.
For those considering engagement in the Lloyd’s market, now may be an opportune time to consider adding a Lloyd’s investment to their overall portfolio mix. As Curtis aptly puts it, “Following a stellar 2023 and a promising 2024, 2025 is shaping up to be another strong year.”
Connecting you to the insurance market
To find out more about how we can help you explore opportunities in the Lloyd’s market, get in touch with Tom Martin, Private Banker. Email: TomMartin@arbuthnot.co.uk.