’I believe it’s better to give guidance that is really achievable,’ says chief financial officer
Lloyd’s of London chief financial officer Burkhard Keese has blamed “uncertain times” for the market’s forecast of a more cautious combined operating ratio (COR) for 2023.
The insurer reported a COR performance of 91.9% in its full 2022 results published last week (23 March 2023), an improvement from the 93.5% recorded in 2021.
However, Lloyd’s said it expected to hit a COR of below 95% in 2023, despite last year being well below that figure.
When it was put to the market that it could have guided for a lower ratio, Keese explained that uncertainty made it “difficult” to forecast a lower figure.
As a result, he said Lloyd’s did not want to be in a position where it would have to go back on its expectations.
During an earnings call on 23 March 2023, Keese explained: “2022 was a really good year with a 91.9% COR, but to guide something in these uncertain times is a bit difficult.
“In these uncertain times – combined with the economic outlook and inflation – I believe it’s better to give guidance that is really achievable.
“We really want to achieve this and not give out guidance that we then may have to basically recall in half a year.”
‘Better value’
Meanwhile, Lloyd’s chief executive John Neal said 2023 would be “key” for digital transformation, with the adoption of Blueprint II solutions being a “crucial determinant of success”.
Read: Lloyd’s of London provides Blueprint II progress update after ‘great’ 2022
Read: Briefing – Lloyd’s breaks silence on Blueprint Two advancements, but is ‘steady progress’ enough?
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He added the market would also seek to “generate even better value for customers and investors”.
“As we look ahead to 2023, we’ll be supporting our market to grow where we’ve seen a track record of strong performance, expertise and ambition – while sustaining the underwriting excellence for which our market is renowned,” Neal said.
“We’ll seek to generate even better value for our customers and investors as we continue to tackle cost and inefficiency.
“We’ll also maintain our focus on attracting and developing the very brightest minds from around the world, ensuring Lloyd’s remains the innovative force it’s been for the past three centuries.”
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