Lloyd’s has urged market participants to focus on profit margins amid concerns about casualty rate adequacy, property pricing declines and cyber demand.

Chief of market performance Rachel Turk says the rating environment has softened more quickly than anticipated.

“There are, of course, pockets of concern, but in aggregate, trading conditions have been favourable,” she said in a quarterly market message.

“But we need to be realistic about the challenges ahead. Look around corners and try to manage the inevitable slide towards the softest part of the cycle.”

Ms Turk says social inflation remains a problem in casualty and “price adequacy is questionable”, while a supply and demand imbalance presents challenges in cyber.

“The anticipated growth in new buyers for cyber just isn’t coming through, so the market continues to chase the same pool,” she said.

“The level of ambition against a backdrop of stalling demand needs to be considered.”

Ms Turk highlights “the pace of decrease” in property and likely further pressure after a relatively light North Atlantic hurricane season.

She urges market participants not to “give away hard-earned margin” across business areas.

“Have the courage of your own convictions and don’t follow the herd,” she said. “Adjust as market conditions change, address underperformance and set yourself up for a smoother ride through the cycle”.

Lloyd’s business plan for next year includes gross written premium of £67.4 billion ($136 billion) and a net combined operating ratio of 91.2%.