Lloyd’s CEO eyes £56bn GWP for 2023 after ‘outstanding’ growth in 2022

Despite heavy investment losses and headwinds that included major claims in Ukraine and Hurricane Ian in the US,  Lloyd’s 2022 results showed the market bouncing back. Its CEO John Neal described its underwriting performance as “outstanding” following several years of improvement to get it back into shape.

Insurance and reinsurance marketplace Lloyd’s of London posted a much-improved underwriting profit and solid growth in its full-year results as its CEO flagged 20 consecutive quarters of positive price improvement. However, it still posted a loss overall due to massive net investment hit.

The market reported a loss before tax of £0.8 billion, compared with a 2021 profit of £2.3 billion. This was due to a net investment loss of £3.1 billion compared with a profit of £0.9 billion in 2021. It said that mark-to-market accounting rules on fixed income investments led to this, however, the loss is expected to reverse in the coming years as assets reach maturity and benefit from favourable interest rates, the market said.

Lloyd’s gross written premiums (GWP) increased by 19% to reach £46.7 billion, a significant increase on the £39.2 billion it posted in 2021. This included 4% volume growth.

The market posted an underwriting profit of £2.6 billion, compared with £1.7 billion a year earlier and a combined ratio of 91.9% – a 1.6 percentage point improvement and the strongest result since 2015.

It noted that in a year that saw major losses contribute 12.7% to the combined ratio – including substantial claims from the conflict in Ukraine and Hurricane Ian in the US – Lloyd’s paid out over £21 billion to customers.

Its attritional loss ratio improved again to 48.4% (FY2021: 48.9%) while the expense ratio improved by 1.1 percentage points to 34.4% (FY 2021: 35.5%). With prices increasing by 8%, the Lloyd’s market has now seen 20 consecutive quarters of positive price improvement.

John Neal, CEO of Lloyd’s said: “This is an outstanding underwriting result that follows several years of performance improvement, a comprehensive plan to digitalise our market, steady and sustained progress on our culture and purposeful action to help our industry and society manage the biggest challenges of our time.”

“That focus is bearing fruit in the form of consistent performance and a resilient balance sheet, allowing us to be the source of stability, protection and advice that our stakeholders – customers, governments, regulators, capital providers and intermediaries – need at this time,” added Bruce Carnegie-Brown, chairman of Lloyd’s.

Looking to 2023, Lloyd’s expects a premium growth of around £56 billion, a combined ratio below 95% and a total investment performance on assets of more than 3%.

“2023 will be a key year for digital transformation, where our market’s engagement and adoption of the Blueprint Two solutions will be the crucial determinant of success. We’ll also maintain our focus on attracting and developing the very brightest minds from around the world – ensuring Lloyd’s remains the innovative force it’s been for the past three centuries,” Neal said.

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