Lloyd’s has reported strong underwriting performance in a trading update released Wednesday. The official full-year results will be released March 23, along with guidance on expectations for fiscal 2023.
Highlights of the update include:
Gross written premium increased by more than 19% to more than £46 billion (about $54.4 billion), up from £39.2 billion in FY 2021. The result reflected a combination of growth from the strong US dollar (8%), direct price increases (8%) and organic growth (3%)
Underwriting performance saw better-than-expected improvement by 1.6 percentage points to deliver a combined ratio of 91.9% despite major claims of 12.7%, including losses arising from the conflict in Ukraine and Hurricane Ian in Florida
The attritional loss ratio has improved to 48.4% from 48.9% in FY 2021. Prior year releases were 3.6% (FY 2021: 2.1%), and the expense ratio fell to 34.4% (FY 2021: 35.5%)
The mark-to-market accounting treatment of rising interest rates on fixed-income portfolios forced a writedown of asset values and is projected to lead to higher yields and investment returns in coming years. The reported investment of loss of about £3 billion (FY 2021: £0.9 billion) is in line with the result reported at the half year. The investment loss has no cash impact and is expected to be reversed out over the next two to three years as the assets reach maturity, Lloyd’s said
The investment loss will result in a full-year loss before tax of about £0.8 billion (FY 2021: profit of £2.3 billion
“Today we are presenting an underwriting performance and capital position that are as good as Lloyd’s has reported in recent memory,” said John Neal, Lloyd’s CEO. “2022 showed both strong premium growth and a continued fall in expenses, which, alongside a high-quality balance sheet, demonstrate that our market is in the best shape to offer both an attractive return to capital and investors as well as providing businesses the insurance protection they need in these uncertain times.”