Lloyd’s grows GWP 19%, reports 91.9% combined ratio for 2022

The Lloyd’s insurance and reinsurance market has delivered underwriting profitability for 2022, with its preliminary results signalling strong growth and a 91.9% combined ratio for the year.

As we reported earlier this week, analysts were forecasting that the Lloyd’s insurance and reinsurance market could report its lowest combined ratio since 2014.

It now seems that hasn’t quite come to pass, as the analysts had predicted a sub-90’s combined ratio, but still it appears Lloyd’s combined ratio result for 2022 could be its best since 2015.

Lloyd’s pre-announced today that its gross written premium (GWP) for 2022 had increased by over 19%, to more than £46bn (FY 2021: £39.2bn).

This reflects a combination of growth from the strong USD (8%) direct price increases (8%) and organic growth (3%), Lloyd’s said.

Lloyd’s also noted that the market’s underwriting performance improved more than expected, some 1.6 percentage points higher, to deliver a combined ratio of 91.9%.

This despite major claims of 12.7%, including losses arising from the conflict in Ukraine and from Hurricane Ian in Florida.

Lloyd’s also said that its attritional loss ratio has improved to 48.4% (FY 2021: 48.9%), but prior year reserve releases rose to 3.6% (FY2021: 2.1%), while the expense ratio fell to 34.4% (FY 2021: 35.5%).

But the investment side suffered in the global macro-economic environment, with Lloyd’s forecasting a 2022 investment loss of approximately £3bn, that will drive a full year loss before tax of around £0.8bn (FY2021: profit £2.3bn).

Lloyd’s said the investment loss has no cash impact and the market anticipates it being reversed out over the next two to three years, as the assets reach maturity.

John Neal, Lloyd’s CEO commented, “Today we are presenting an underwriting performance and capital position as good as Lloyd’s has reported in recent memory.

“2022 showed both strong premium growth and a continued fall in expenses, which, alongside a high-quality balance sheet demonstrate that our market is in the best shape to offer both an attractive return to capital and investors as well as providing businesses the insurance protection they need in these uncertain times.”