Lloyd’s achieves huge jump in underwriting profit to £5.9bn as rates rise 7%

Lloyd’s saw its underwriting profit more than double last year to £5.9bn from £2.6bn in 2022, helped by price rises of 7% and a much-improved combined ratio.

The market was the latest carrier to deliver very strong 2023 numbers and may leave some clients wondering why the cost of insurance remains so high.

Lloyd’s increased gross written premiums by 11.6% last year to £51.1bn, with 7% coming from organic growth and 7% from higher prices.

The market’s combined ratio improved 7.9 percentage points over the prior year to 84% from 91.9%.

The attritional loss ratio remained stable at 48.3%, while the expense ratio remained flat at 34.4%.

Lloyd’s swung to an investment return of £5.3bn from a loss of £3.1bn in 2022. It said this was caused by the higher interest rate environment and the unwind of the mark to market accounting treatment on fixed income portfolios.

Burkhard Keese, Lloyd’s CFO, said: “2023 was an outstanding year for the Lloyd’s market. We continued to see sustainable, profitable growth and performance, leading to our best underwriting result in recent history and a rock solid balance sheet that gives us and our stakeholders confidence in an uncertain environment.”

“We will maintain our focus on underwriting and capital discipline and we look forward to announcing our full results and strategic progress later this month,” he added.

The preliminary results released by Lloyd’s today will be followed by full 2023 results on 28 March.