Battening Down the Hatches
The London Rush
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Morning, I'm Louise Moon
Lloyds is preparing for all eventualities, having set aside £35 million to deal with the potential impact from US tariffs.
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Best's Market Segment Report: Reinsurers' Disciplined Capital Deployment and Underwriting Remain Key Foundations
OLDWICK, N.J., August 14, 2025--(BUSINESS WIRE)--A recalibration of the global reinsurance market since the January 2023 renewal period has led to a more-durable market structure characterized by reduced earnings volatility and stronger margins, supporting AM Best's continued positive outlook on the industry. The Best's Market Segment Report, "Reinsurers' Disciplined Capital Deployment and Underwriting Remain Key Foundations," starts off AM Best's look at the global reinsurance industry ahead of the Rendez-Vous de Septembre in Monte Carlo. Other reports, including AM Best's ranking of top global reinsurance groups and in-depth looks at the insurance-linked securities, Lloyd's, life/annuity, health and regional reinsurance markets, will be available during August and September. According to this report, the shift since the January 2023 renewal in how risk is priced, shared and retained across the reinsurance industry has carried forward and translated into a second-straight year of solid results in 2024. The European "Big Four" reinsurers posted a discounted combined ratio of 86.4% under IFRS 17; the discounting on average lowers the combined ratio by approximately eight percentage points. The U.S. and Bermuda composite reported an undiscounted combined ratio of 89.5% under U.S. GAAP. These results confirm that underwriting profitability has not only rebounded but is being sustained in the current reinsurance cycle. "Reinsurers' risk-adjusted capitalization levels remain robust, reflecting retained earnings and disciplined capital management, and the strong underwriting profitability is being augmented by a surge in investment income given elevated interest rates," said Michael Lagomarsino, senior director, AM Best. "The absence of material new global reinsurance entrants also is ensuring that structural market discipline is maintained, distinguishing the current environment from previous market cycles." According to the report, most global reinsurers have maintained their strong performance through the first half of 2025, despite global weather-related insured losses that will likely top USD 100 billion. These losses are primarily driven by the California wildfires, which many reinsurers are marking in the range of USD 30-50 billion. "Assuming no further material weather events in the second half of 2025, the combination of disciplined underwriting, rate adequacy and robust investment income should deliver full-year operating results exceeding the cost of capital," said Dan Hofmeister, associate director, AM Best. Global reinsurers also face headwinds other than climate change, including social inflation, growing geopolitical tensions and trade disputes, and these challenges underscore the importance of the market's improved structural foundations and explain why AM Best's outlook, though positive, remains closely scrutinized. "The question now facing the industry is whether the improvements in terms and conditions represent a durable shift," said Steven Chirico, director, AM Best. "The lessons of past cycles suggest caution, but reinsurer sentiment has ensured tighter exposure management and market disciple in the current cycle." To access the full copy of this market segment report, please visit For global reinsurance reports ahead of Rendez-Vous de Septembre, as well as video coverage of the event, please visit AM Best's Reinsurance Information center. Lastly, AM Best will host its annual reinsurance market briefing at Rendez-Vous de Septembre on Sept. 7, 2025, at 10:15 a.m. (CEST) in Monte Carlo. For more information, please visit the event website. AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit Copyright © 2025 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED. View source version on Contacts Dan Hofmeister, CFA, FRM, CAIA, CPC Associate Director +1 908 882 1893 Steven M. Chirico, CPA Director +1 908 882 1694 Michael Lagomarsino, CFA, FRM Senior Director +1 908 882 1993 Christopher Sharkey Associate Director, Public Relations +1 908 882 2310 Al Slavin Senior Public Relations Specialist +1 908 882 2318
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Lloyds (LSE: LLOY) shares have flown since I bought them in 2023. They're up 46% in 12 months and 93% over two years. With reinvested dividends, my holding has more than doubled in value, and I'm in no rush to sell. The same can't be said for Taylor Wimpey (LSE: TW.), which I bought at the same time. After an early burst, the share price has slumped 36% over the past year. Even with its giant trailing 9.5% dividend yield, I'm still about 10% down overall. I'm not too concerned. Lloyds has put me comfortably ahead overall, and I believe Taylor Wimpey will recover in time. Here's something that intrigues me. Both have strong UK exposure, yet the struggling economy has affected them very differently. Banking sector rebound Lloyds is the country's biggest mortgage lender through Halifax, so I might have expected higher interest rates and weak housing growth to hit it hard. Instead, inflation has widened net interest margins, the gap between what it pays savers and charges borrowers. Taylor Wimpey has had the opposite experience. Inflation has driven up the cost of labour and materials while denting house buyer affordability. In 2024, it completed 10,593 homes, down from 10,848 the year before. The average private sale price fell 3.8%, from £370,000 to £356,000. Lloyds has also benefitted from a wider shift in sentiment towards banking stocks, which lifted the sector, while housebuilders as a whole went the other way. FTSE 100 dividend stars Markets shrugged off a drop in Lloyds' 2024 profits from £5.5bn to £4.5bn. It helped that it still had enough cash to launched a £1.75bn share buyback. The bank also increased its final dividend by 15% to 3.17p. By sharp contrast, Taylor Wimpey's profits plunged from £349m in 2023 to £220m in 2024. The board trimmed its dividend by 1.25% to 9.46p. There was no buyback. Lloyds' trailing yield's notably lower at 3.8%, although that's mostly due to the rising share price. It's forecast to hit 4.27% over the next year. Taylor Wimpey's is expected to dip slightly to 9.11%, although that's still magnificent. Forecast growth and income Analyst consensus suggests the Lloyds share price could hit 90.72p within 12 months, an 8.62% rise. Add its forecast yield and the total return could be 12.89%, which would turn £10,000 into £11,289. For Taylor Wimpey, analysts predict 136.4p, a massive 36.34% gain. Add the yield and the total return could hit 45.45%, turning £10,000 into £14,545. That's £3,256 more – if those forecasts are true, of course. I've been anticipating a housebuilding sector recovery for years, and it hasn't happened yet. Taylor Wimpey's slightly cheaper too, trading at a price-to-earnings ratio of 11.98 compared to Lloyds at 13.18. That may tempt investors to consider buying, though both firms remain vulnerable if the economy stays weak and Budget tax hikes knock sentiment further. I bought both these stocks to hold for the long-term, and that's not changing. But I have some cash in my trading account now, and I'm seriously considering Taylor Wimpey. I think it looks the better recovery play today. The post Prediction: in 12 months, Taylor Wimpey and Lloyds shares could turn £10k into… appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Harvey Jones has positions in Lloyds Banking Group Plc and Taylor Wimpey Plc. The Motley Fool UK has recommended Lloyds Banking Group Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
