Lloyd’s reported strong underwriting performance in a trade update released on Wednesday. Official results for the full year will be released on March 23, along with guidance on the outlook for fiscal 2023.
Highlights of the update include:
- Gross written premiums rose 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 strength of the US dollar (8%), and increases Direct pricing (8%) and organic growth (3%)
- Underwriting performance improved better than expected by 1.6 percentage points to deliver a combined ratio of 91.9% despite principal claims of 12.7%, including losses from conflict in Ukraine and Hurricane Ian in Florida.
- The absorption loss ratio improved to 48.4% from 48.9% in FY2021. Prior year issuances were 3.6% (FY21: 2.1%), and the expense ratio decreased to 34.4% (FY2021: 35.5%)
- The accounting treatment from a market perspective of increasing interest rates on fixed income portfolios has reduced the value of assets and is expected to lead to higher returns and investment returns in the coming years. The reported investment at a loss of around £3 billion (FY 2021: £0.9 billion) is in line with the reported half-year result. Lloyd’s said the investment loss has no monetary impact and is expected to be reversed within the next two to three years as the assets reach maturity.
- The investment loss would result in a full year pre-tax loss of approximately £0.8 billion (FY 2021: £2.3 billion gain
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“Today we deliver underwriting performance and a capital position that is as good as Lloyd has reported in recent memory,” said John Neal, Lloyd’s chief executive officer. “2022 showed strong premium growth and a continued decline in expenses, which, combined with a high quality balance sheet, demonstrates that our market is in the best condition to offer an attractive return on capital and investors as well as provide companies with the insurance protection they need in these uncertain times. “.
Lloyd’s recently received an Improved debt rating from S&P Global Ratings. The company also recently added Chief Technology Officer Joe Hurd to the Lloyd’s board.
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