Around a third of 2021 business plans being submitted to Lloyd’s at this stage in the planning season are unrealistic in terms of growth or profitability expectations, CEO John Neal has said.

Speaking at a press conference after Lloyd’s H1 results today, the executive said no business plans had yet been approved at this point in the year, with the first of four “waves” of plans now being assessed.

An early assessment shows there is still a misalignment of expectations between Lloyd’s and some syndicates.

There is a percentage of plans Lloyd’s feels comfortable with, and a further proportion where “we feel we will get to where we want to be in terms of premium expectation or performance”, Neal said.

These two cohorts and the light-touch syndicates – which get automatic plan approval – account for around two-thirds of the market, the CEO continued.

“About a third of the market we would say we don’t see a clear path yet to plans which are logical, realistic and achievable,” Neal said.

“I am not discouraged by that, it’s where we would hope to be, but there’s lots of conversations to be had.”

The CEO said Lloyd’s would grow in the “high single digits” for next year, with around £12bn-£13bn ($15.6bn-$16.7bn) of new business set to be approved and new syndicates set to join the platform.

“Two years ago we were talking about £7bn of new business,” Neal added.

“I think we are getting the balance right for giving the flexibility for business growth… I think that is pretty significant growth for 2021.”

The CEO’s comments came after a set of Lloyd’s H1 results which were battered by £2.4bn of Covid-19 claims but showed significant improvement in the underlying underwriting performance of the market, with the attritional loss ratio declining 7.1 percentage points year on year to 52.6%.

That improvement was mainly driven by the past three years of remediation efforts, Neal said, without giving further detail. Improving rates gave a further tailwind, while Lloyd’s also booked a small amount of benefit from reduced loss frequency from certain lines as a result of Covid-19.

The CEO added: “We are near to where we would hope to be on an underlying basis. We expect to see further improvement through 2021 as the market works on delivering plans which are logical, realistic and achievable.”