The investment appeal of Lloyd’s – APCL

For investors hunting for uncorrelated returns, the Lloyd’s market is firmly on the radar. Double-digit gains in recent years have caught the eye of high-net-worth individuals, family offices, and institutional capital – all seeking access to a global specialty risk portfolio through a single structure.

“From our perspective, there’s been a real resurgence in interest from both new and existing clients,” says Kate Tongue, executive director at Argenta Private Capital Limited (APCL). “This is partly because people are seeing the double-digit returns but also because they’re looking for diversification in their portfolios.”

Tongue notes that for many investors, the attraction runs deeper than current market conditions. “It’s about having exposure to a unique asset class with global reach. When you invest, you’re part of a market that’s been around for centuries, trading in specialist risks across more than 200 territories.”

APCL’s managing director, Robert Flach, says that recent results reflect more than a favourable run of years. “Lloyd’s has had two very strong years. That’s not just underwriting discipline; it’s also the result of syndicates focusing on classes where they have genuine expertise.”

The Lloyd’s market delivered an underwriting profit in 2024 well above the long-term average. But Tongue and Flach stress that investors must balance the attraction of high returns with an understanding of volatility.

Tongue says: “People need to remember this is an insurance business – it’s volatile by nature. Major losses happen. In 2024 we saw events like the Baltimore bridge collapse, hurricanes, earthquakes, cyber outages. You can’t ignore that part of the picture.”

Diversification is key to smoothing out shocks, Flach underscores.

“We match investors with a spread of syndicates, so no one event should dominate the outcome. The benefit of the Lloyd’s model is that you can get exposure to a huge range of risks in one structure, from marine and energy to cyber and specialty property.”

Thanks to corporate member and protected cell company structures, the barriers to entry have eased for high-net-worth individuals and corporate backers, alike.

“The structures are there to make it as efficient as possible,” says Tongue. “They also allow corporate investors, including re/insurers and family offices, to participate alongside private capital in the same syndicates.”

While conditions remain favourable, Flach is mindful of the cycle. “We’re still in a good part of the underwriting cycle, but insurance is cyclical. Capacity is coming in, and competition will inevitably increase,” he says.

The investors who tend to succeed, he says, are those who recognise that Lloyd’s is a long-term proposition.

Flach continues: “We’ve been doing this for over 60 years. What we tell clients is that patience pays off – you can’t judge Lloyd’s on a single year.”

Tongue points out that APCL’s role is as much about risk management as capital access.

“Our job is to navigate the market on their behalf – to select the right syndicates, manage the capital efficiently, and provide transparency. That’s how you deliver sustainable results.”

The appeal of Lloyd’s is enduring. “You’re backing some of the best underwriting talent in the world,” Flach says. “If you take a measured, long-term approach, you can participate in a market that’s still delivering exceptional opportunities.”

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