Lloyd’s of London has had some mixed fortunes, it seems. The insurance and reinsurance syndicate revealed they have lost £1.8 billion in H1 of this year but underwriting performance is on the up which flies in the face of the £1.1 billion that was reserved for Ukraine-related claims.
Lloyd’s has been rightly quick to remind everyone that it’s been a challenging year – the war in Ukraine, inflation, climate-related catastrophes as well as geopolitical tension across the globe – so this trend is unlikely to be frustrating forever.
The overall numbers
Last year Lloyd’s reported a profit of £1.4 billion in the same period last year but this year has suffered a £3.1 billion net investment loss compared with last year’s income of £600 million.
The underwriting numbers
Underwriting profit for the first half of the year increased almost £300 million from last year’s £960 million and the market’s combined ratio rose to its highest peak since 2015 (91.4%).
In H1 of 2022, the attritional loss ratio improved to 48.9% and the expense ratio improved to 35.4%.
The syndicate has said that gross written premiums jumped by 17.4%, year-on-year, to £24 billion in H1 2022, as net earned premium rose by 14.4% to £14.1 billion.
Lloyd’s also marked five consecutive years of positive rate movement as prices increased by 7.7%.
Alongside the marked improvement in underwriting, there are other reasons to feel positive for Lloyd’s. Their capital and solvency positions make for exciting reading as their net resources stand at around £3.65 billion and central solvency and market solvency ratios are at 395% and 179% respectively. With interest rates rising, we should see overall benefits to the industry as a whole, having been the cause of some sleepless nights over the last few years.
What Lloyd’s had to say
John Neal, Chief Executive Officer (CEO) at Lloyd’s, commented: “With political and economic uncertainty looming large over society, it’s more important than ever that insurers are ready to support. Lloyd’s results today point to both the sustainable performance of our market and the resilience of our capital position, enabling us to continue supporting customers through whatever lies ahead.
“Rising interest rates, while prompting an unrealised investment loss on paper at the half year, will be good news for insurers in the long term as returns on assets strengthen in 2023 and beyond. Meanwhile, with the conflict in Ukraine continuing to inflict devastating consequences, we’ve taken proactive steps to protect our customers from the fallout while ensuring we can support them – and continue driving sustainable performance – through the uncertain times ahead.”
On Russia, a Lloyd’s spokesperson said: ““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,” says Lloyd’s.”