Lloyds Bank, a leading UK financial services provider serving corporate, institutional and retail clients, has announced its results 10th Annual Financial Institution Sentiment Survey.
The research gathered the views of more than 100 senior leaders from the UK banking, insurance, private equity, asset management and wealth management industries.
Lloyds Bank’s findings indicate that insurers are maintaining a cautious approach in response to ongoing market uncertainty, with a clear emphasis on strengthening liquidity positions and allocating capital efficiently.
Half of the insurers surveyed by Lloyds Bank said maintaining strong liquidity buffers to meet regulatory and stress test requirements will be their top priority in the year ahead.
Meanwhile, a quarter of respondents said they were focused on strengthening liquidity forecasting and stress testing processes to improve preparedness for potential market disruptions.
The Lloyds Bank research also noted that companies will continue to focus on efficient capital allocation. One-third of surveyed insurers see improving yields on fixed income and credit portfolios as their main investment focus, while liability-driven investment strategies are also seen as an important area of ​​focus.
The survey shows that insurers are balancing caution with a willingness to pursue appropriate opportunities as they seek to strengthen financial resilience while generating returns in a changing market environment.
The insurers’ findings are part of a wider assessment by Lloyds of sentiment across the financial services industry, which points to growing optimism about future growth prospects.
The survey showed that 94% of respondents expect their organizations to expand over the next decade, compared with 81% in last year’s study. Confidence has also improved in the shorter term, with 92% expecting growth over the next five years, up from 83%, while expectations for growth over the next 12 months have risen from 54% to 67%.
Lloyds Bank has found that investment in technology is becoming increasingly important to future growth plans. More than three-quarters of respondents said investment in emerging technologies is now a key strategic priority, almost double from 41% a year ago and will rise sharply from 25% by 2024. The results indicate that many financial institutions are moving from exploring technological capabilities to integrating them more fully into their operations.
Artificial intelligence figured prominently in the survey results. Lloyds Bank reports that 93% of respondents believe artificial intelligence and machine learning will have the greatest impact on the UK financial services industry over the next five years. Additionally, 91% of respondents expect spending on AI-related initiatives within their organizations to increase over the next 12 months.
The survey also highlights companies’ willingness to invest in long-term development. Nearly two-thirds of respondents said they intend to increase capital spending compared with the previous year, reflecting a focus on improving productivity, increasing operational resilience and supporting future growth.
Research from Lloyds Bank further shows increased confidence in the UK’s status as an international financial centre. Seven in 10 respondents said they expected the UK to maintain its position as the world’s leading financial services centre, up from 6 in 10 in last year’s survey.
Lloyds Bank said this reflected continued confidence in the UK’s regulatory environment, mature capital markets, international links and specialist financial expertise.
Christian De Monte, head of corporate and institutional insurance and group subsidiaries and managing director at Lloyds, said: “Insurers are operating in a more complex environment where capital strength, liquidity resilience and disciplined risk management are critical for long-term growth.
“The priority is not just growth, but building balance sheets that can withstand stress while continuing to deliver stable results. Pensions risk transfer, particularly for life insurance companies, continues to reshape markets, and they play a more strategic role in deploying long-term capital and supporting the wider economy through investments.”
Lisa Francis, global head of CIB at Lloyds Bank, added: “Despite global uncertainty, financial institutions are building confidence by leveraging technology to drive long-term growth. The industry is prioritizing areas that will determine future competitiveness, from artificial intelligence and emerging technologies to data, talent and international expansion.
“What’s clear is that growth over the next decade will depend on the ability to adapt, invest in and expand new capabilities. Advanced AI and data solutions are moving from ambition to adoption, with institutions increasingly focusing on how these technologies can boost productivity, deepen client relationships and create new opportunities across markets.”
