Perspectives 2025: Lloyd's of London insurance market – Trends, risks, and rewards for investors

Industry experts, Argenta Private Capital Ltd, share insights on the Lloyd's of London insurance market and explore the investment opportunities for insurance as an asset class.

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One of the oldest financial markets in the developed world, the Lloyd's of London insurance market is one of the least understood.  To shed some light on this market, we spoke to Kevin Jackson, Client Director, and Roger Curtis, Deputy Head of the Syndicate Research Team at Argenta Private Capital Ltd (“APCL”).

APCL is a specialist insurance capital adviser providing a range of products and advice to individual and corporate investors at Lloyd’s. We work closely with APCL to offer our clients a path to invest in the Lloyd's of London insurance market.

In this conversation we explore insurance as an asset class and seek Kevin and Roger’s views on trends, opportunities, risks in the insurance market, and what these developments mean for investors in 2025.

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Argenta Private Capital Ltd

Insurance as an investment asset class

An important distinction to make about Lloyd's of London is that it is not an insurance company; it is an insurance market. 

Lloyd’s offers an alternative investment opportunity. Unlike traditional asset classes, it allows investors to gain exposure to the global insurance market’s risk and reward cyclical dynamics. 

Lloyd’s syndicates (groups of members who come together to provide capital and underwrite insurance risks) provide a way for investors to diversify their portfolios while benefiting from an income stream that is relatively uncorrelated with broader financial markets. 

Insurance investments can offer some resilience against economic downturns. Since businesses and individuals will always require coverage for risk mitigation, Lloyd’s syndicates have the potential to generate returns, regardless of market conditions. This opportunity, coupled with the potential for non-correlating returns, makes insurance an attractive alternative asset class for those seeking long-term financial growth.

 

Political and economic influences on the market

According to Roger Curtis “Political and economic issues are playing a significant role in shaping the market.” From conflicts in the Middle East and Ukraine to shifts in U.S. leadership, these global events are impacting certain insurance syndicates. In Europe, economic uncertainty in France, Italy, Germany, and Spain adds another layer of complexity.

Despite these uncertainties, Curtis sees opportunity: “This uncertainty creates demand for Lloyd’s and the wider insurance sector, as businesses cannot operate without adequate coverage.”

Roger Curtis, Deputy Head of the Syndicate Research Team, Argenta Private Capital Ltd

Opportunities amid uncertainty

Cyber insurance remains a major growth area. “Cyber is a prime example of how Lloyd’s and certain syndicates have evolved to meet emerging risks,” says Kevin Jackson.

Originally centred on data breaches, cyber policies have adapted to focus on ransomware and artificial intelligence poses new challenges. “AI is the next frontier – how do we use it, and how do we insure against it?” Jackson notes.

Inheritance tax planning is another key driver of participation at Lloyd’s, with many investors leveraging business asset relief advantages to pass on wealth efficiently to the next generation.

Participating in the Lloyd’s insurance market can help with inheritance tax (IHT) planning. Investments through a limited liability partnership or company are considered a business, qualifying for Business Asset Relief (BAR). This means that when the investor passes away, a proportion of the value of their business might not be subject to IHT, allowing wealth to be passed on more efficiently to the next generation.

This structure makes Lloyd’s underwriting an attractive option for investors looking to optimise their estate planning.

Kevin Jackson, Client Director, Argenta Private Capital Ltd

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.

Perspectives 2025

 

 

Explore further 

This article is part of our Perspectives 2025 editorial series, exploring insights and trends across a range of topics that are of interest to our clients.

 

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DISCLAIMER

This communication should be considered a marketing communication. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research. It is for information purposes only and does not constitute advice, a solicitation, recommendation or an offer to buy or sell any security or other investment or banking product or service. You should seek professional advice before making any investment decision. The value of investments, and the income from them can fall as well as rise, and may be affected by exchange rate fluctuations. Investors could get back less than they invest. Past performance is not a reliable indicator of future results. The tax treatment of investments depends upon individual circumstances and may be subject to change.

The contents of this communication are based on opinions or conditions as at the date of writing and may change without notice. To the extent permitted by law or regulation, no warranty of accuracy or completeness of this information is given and no liability is accepted for its use or reliance on it.