Lloyd’s Reports Strong Profitable Growth In 2022 Results
Lloyd’s, the world’s leading marketplace for commercial, corporate and specialty risk solutions, has announced a strong set of financial results for the Full Year 2022 (FY2022).
The market’s profitable growth continued with Gross Written Premium (GWP) increasing by 19% to £46.7bn (FY2021: £39.2bn), including 4% volume growth.
Lloyd’s focus on sustainable performance resulted in an underwriting profit of £2.6bn (FY2021: £1.7bn) and a combined ratio of 91.9% – a 1.6 percentage point improvement and the strongest result since 2015. 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 £21bn to customers.
The 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%), reflecting efforts to deliver strong performance and reduce the cost of doing business at Lloyd’s. With prices increasing by 8%, the Lloyd’s market has now seen 20 consecutive quarters of positive price improvement.
Mark-to-market accounting rules on fixed income investments led to an overall loss of £0.8bn, however this loss is expected to reverse in the coming years as assets reach maturity and benefit from favourable interest rates.
Lloyd’s capital and solvency position continues to strengthen, with a central solvency and market-wide solvency ratio of 412% and 181% respectively (2021: 388% and 177%). Net resources stood at £40.2bn despite the investment loss, demonstrating the exceptional strength and resilience of Lloyd’s balance sheet.
According to John Neal, Chief Executive Officer at Lloyd’s, “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.
“Looking to 2023, Lloyd’s expects strong premium growth to around £56bn, a combined ratio below 95% and a total investment yield on our assets of more than 3% – enabling us to support customers through the uncertain times ahead.”
The key figures reported in Lloyd’s 2022 full year results are: Gross written premiums of £46.7bn (2021: £39.2bn); Underwriting profit of £2.6bn (2021: profit of £1.7bn); Combined ratio of 91.9% (2021: 93.5%); Loss before tax of £0.8bn (2021: £2.3bn profit); Attritional loss ratio of 48.4% (2021: 48.9%); Net investment loss of £3.1bn (2021: £0.9bn profit); Net resources of £40.2bn (2021: £36.6bn); Central solvency ratio of 412% (2021: 388%) and Market-wide solvency ratio of 181% (2021: 177%).
