Lloyd’s reported a strong underwriting performance in a trading update released on Wednesday. Official full-year results will be released on March 23, along with projections of expectations for fiscal 2023.
Highlights of the update include:
- Gross written premium increased by more than 19% to more than £46bn (c.$54.4bn), up from £39.2bn in FY2021. The result reflected a combination of growth driven by strong US Dollars (8%) and direct price increases (8%) and organic growth (3%)
- Underwriting performance improved better than expected by 1.6 percentage points to a combined ratio of 91.9% despite major losses of 12.7% including losses from the conflict in Ukraine and Hurricane Ian in Florida
- The operating expense ratio has improved to 48.4% from 48.9% in FY2021. Year-over-year releases were 3.6% (FY 2021: 2.1%) and the expense ratio decreased to 34.4% (FY 2021: 35.5%).
- The mark-to-market accounting of rising interest rates on fixed income portfolios has forced asset write-downs and is expected to result in higher yields and investment returns for years to come. The reported investment loss of around £3bn (FY2021: £0.9bn) is in line with the result reported at mid-year. The investment loss has no cash impact and is expected to be reversed over the next two to three years as the assets mature, Lloyd’s said
- The investment loss will result in a full year pre-tax loss of around £0.8bn (FY2021: profit of £2.3bn).
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“Today we present an underwriting performance and capital position that is as strong as Lloyd’s has recently reported,” said John Neal, CEO of Lloyd’s. “2022 showed both strong premium growth and a steady decline in spending, which, alongside a high-quality balance sheet, demonstrates that our market is in the best shape to both offer an attractive return for capital and investors, as well as offer insurance to businesses , which they need in these uncertain times.”
Lloyd’s recently received an upgraded debt rating from S&P Global Ratings. The company also recently added technology executive Joe Hurd to Lloyd’s Council.
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