Lloyd’s syndicates plotted 14% GWP growth for 2023, 1/3 in property

Lloyd’s syndicates pencilled in 14.3% growth in gross written premium for 2023 at constant FX rates in the business plans ultimately approved by the market, Lloyd’s chief of markets Patrick Tiernan (Pictured) has said.

The top line would rise to some £56 billion under the plans “primarily driven by inflation with [risk adjusted rate change] RARC and exposure growth not out of line with what we saw in 2022.”

“For the majority of classes, this implies double digit rate increases for another year at least,” Tiernan said.

Syndicates have also pencilled in a combined ratio below the 95% mark “in lin4 with our expectations that syndicates should be achieving a sustainable profit,” he said.

Growth is reserved for proven winners and a handful of upstarts. Some 60% of the growth in capacity went to “outperforming and good” syndicates. New syndicates make up 15% of the growth to meet Lloyd’s expectations from the moment of their entry.

“Underperforming syndicates have seen their exposure cut y more than 10%,” Tiernan said, “and in the main only grow in line with rate and inflation.”

Planned premium in property is at about £18 billion, roughly 1/3 of the planned book and best performers with “capacity, capability and expertise” could be allowed to further “lean into that opportunity.”

A swathe of lines considered “war-impacted” is under some scrutiny. The ad-hoc segment shows up to the tune of £6 billion in gross written premium in 2023 plans, just over 10% of the total. Lloyd’s is concerned about how new wordings in the renewals season may be creating coverage gaps to the underlying covers.

The rest of the planned premium, about 60% of the total, is dominated by casualty and financial and professional lines. Despite nerves around property and war-impacted lines, Tiernan vows that the Lloyd’s oversight focus is in no way diminished. Cyber is called out for continued fast growth and the weight in the Lloyd’s books; D&O gets mention for a dynamic change in conditions.

Any number of those numbers could yet be up for revision, Tiernan said separately.  Lloyd’s syndicates may be forced back at the drawing board yet again to craft 2023 business plans as market and macro conditions “without recent precedent” changed beyond what could have been forecast when planning began, Tiernan said.

Did you get value from this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.