Property insurance again most profitable business line at Lloyd’s

Non-life Lloyd’s syndicates enjoyed a significant improvement in profits in 2023, with an 81 percent uptick in aggregate underwriting result compared to 2022, according to analysis of annual results by market intelligence firm Insurance DataLab.

“This upturn in performance was driven by a 25% fall in gross claims incurred.”

It showed that these syndicates reported a £2.8 billion aggregate underwriting profit for 2023, up from £1.6 billion the previous year as the market made it three consecutive years of underwriting profitability. 

This upturn in performance was driven by a 25 percent fall in gross claims incurred to £14.4 billion—down from £19.2 billion in 2022—although this was partially offset by a 13 percent increase in operating expenses to £10.0 billion (2022: £8.8 billion). 

Premium growth has also slowed over the last 12 months, with gross written premium (GWP) rising by 6.8 percent to £34.1 billion. This follows two years of double-digit premium growth in the market after premiums increased by 28.1 percent and 12.4 percent in 2022 and 2021 respectively. 

Property insurance reclaimed its title as the most profitable business line at Lloyd’s. A 21 percent increase in GWP to £13.1 billion means it is also now the market’s biggest line after it climbed above third-party liability insurance with premiums of £11.5 billion, down from £12.3 billion a year earlier. 

Property syndicates reported an aggregate underwriting profit of £1.6 billion—comfortably ahead of the second most profitable business line, third party liability insurance with an underwriting result of £578.1 million. 

As well as the rise in premiums, property syndicates benefited from a 33 percent fall in gross claims incurred, which more than offset the 18 percent increase in operating expenses. 

It has been a good year all round for the Lloyd’s Market, with each business line reporting an aggregate underwriting profit for the second consecutive year. 

This was primarily driven by falling claims costs across all but one business line—motor insurance, with gross claims incurred rising by 38 percent to £475.9 million. 

Insurance DataLab co-founder Dan King said: “It’s fantastic to see such a big improvement in underwriting results across the non-life Lloyd’s Market, but rising expenses will be of concern, with current levels considerably higher than those reported between 2018 and 2021 after a 20 percent jump in costs in 2022.” 

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