Lloyd’s reported strong underwriting performance in a trading update released on Wednesday. Official full-year results will be released on March 23, along with guidance on expectations for fiscal 2023.
Highlights of the update include:
- Total written premium increased by more than 19% to more than £46 billion (about $54.4 billion), from £39.2 billion in FY 2021. The result reflected a combination of growth from the strong US dollar (8 %), direct price increase (8%) and organic growth (3%)
- Underwriting performance saw a better-than-expected improvement of 1.6 percentage points to deliver a combined ratio of 91.9% despite core claims of 12.7%, including losses arising from the conflict in Ukraine and Hurricane Ian in Florida
- The attritional loss ratio improved to 48.4% from 48.9% in FY 2021. The previous year’s issuance was 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 in fixed-income portfolios has forced a writedown of asset values and is expected to lead to higher yields and investment returns in the coming years. The reported investment loss of around £3 billion (FY 2021: £0.9 billion) is in line with the result reported in the half year. The investment loss has no cash impact and is expected to reverse over the next two to three years as the assets reach maturity, Lloyd said.
- The investment loss will result in a full-year pre-tax loss of around £0.8 billion (FY 2021: profit of £2.3 billion
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“Today we are demonstrating an underwriting performance and capital position as good as Lloyd’s has reported in recent memory,” said John Neal, Lloyd’s CEO. “2022 showed both strong premium growth and a continuous decrease in costs, which, together with a high-quality balance, shows that our market is in the best shape to offer both attractive -attracting returns to capital and investors as well as giving businesses the insurance protection they need in these uncertain times.”
Lloyd recently secured a improved credit rating from S&P Global Ratings. The company also recently added technology executive Joe Hurd at Lloyd’s Council.
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