Lloyd’s reports strong underwriting result

lloyds building

Lloyd’s, the world’s leading marketplace for commercial, corporate and specialty risk solutions, announced an improved underwriting result for the first six months of 2022, with an underwriting profit of £1.2 billion and a combined ratio of 91.4 per cent

Notwithstanding a challenging year of natural catastrophes, the invasion of Ukraine, inflation, and other geopolitical factors, this marks a 0.8 per cent improvement on 2021 and the strongest combined ratio since 2015.

As a result of rising interest rates, Lloyd’s reported an overall loss of £1.8 billion driven by a net investment loss of £3.1 billion from unrealised mark-to-market losses. As investment maturities are short dated, the market will begin to benefit from higher interest rates in 2023 and therefore improved investment returns.

The attritional loss ratio improved to 48.9 per cent, while the expense ratio showed a 0.4 percentage point improvement at 35.4 per cent. Lloyd’s expects expenses to continue falling as it delivers sustainable performance and invests in digitalisation through its Blueprint Two programme to drive improved efficiency.

GWP increased to £24 billion

Lloyd’s also leveraged favourable trading conditions to achieve premium growth, with Gross Written Premium (GWP) increasing 17.4 per cent to £24 billion and Net Earned Premium (NEP) increasing by 14.4 per cent to £14.1 billion. Continuing the trend of five consecutive years of positive rate movement, prices increased by 7.7 per cent.

Lloyd’s continued to help global customers make more confident decisions in the face of unforeseen events. In line with the early and realistic action taken on Covid-19, the market has reserved £1.1 billion net of reinsurance for customers impacted by the conflict in Ukraine. Lloyd’s continues to work with governments and regulators around the world to deliver sanctions against Russia, while implementing the landmark facility announced by our market in July to insure ships recovering grain from Ukraine’s ports.

Lloyd’s capital and solvency positions remain strong with net resources at £36.5 billion, underlining the exceptional strength and resilience of Lloyd’s balance sheet. The central solvency and market solvency ratios, of 395 per cent and 179 per cent respectively, point to Lloyd’s ability to continue supporting customers through uncertainty and challenging conditions.