Lloyd’s H1 2023 results swing back into profit

Lloyd’s of London has announced a profit before tax result of £3.9bn for the first six months of 2023 – a significant year-on-year uplift from H1 2022’s loss of £1.8bn. 

According to it H1 2023 results, published this morning (7 September 2023), Lloyd’s strong performance was also reflected in the insurance marketplace’s gross written premium (GWP) result, which grew by 21.9% (£5.3bn) year-on-year to reach £29.3bn for the most recent period. 

Lloyd’s said this GWP growth was driven by a strong risk-adjusted rate increase of 9.1% as well as 2.2% growth from new syndicates, 6.5% growth from existing syndicates and 4.1% growth due to foreign exchange benefit.

These growth and rating increases were driven largely by the property segment, Lloyd’s added, with strong performance offset by “less attractive conditions in some areas of casualty”.

The market added that the improved profit figure of £3.9bn reflected its disciplined underwriting strategy, which was “furthered by strong new business growth and a period of low exposure to major claims”. 

Underlining a growth in premium and profit was a strong combined operating ratio (COR) of 85.2%. This also fell 6.2 percentage points from H1 2022’s COR of 91.4%, which Lloyd’s said was a demonstration of “continued underwriting performance”. 

Lloyd’s chief executive John Neal said: ”We’re pleased to be reporting a very strong set of results for the year so far – with profitability in both our underwriting and investments, a leading combined ratio, strong premum growth and a bulletproof balance sheet that means we can support customers through a range of shocks and scenarios.

“Combined with the market’s progress in driving sustainable performance, digitalisation and showing leadership from climate transition to culture change – these results set us up to deliver on our positive financial outlook for 2023.” 

Sustainable performance 

Neal added: ”Insurers are rightly judged on their ability to deliver sustainable performance and profitable growth – and Lloyd’s financial results for the first half of 2023 show we are now driving consistent improvement in profitability and an ability to grow sustainably.

“This performance puts us in a strong position for the second half of the year. We remain on track to support the double digit growth for 2023 outlined in March and have now introduced an additional layer of internal performance measurement – covering areas like market growth, capital strength and cultural diversity – to ensure our market builds on the positive progress seen in recent years.” 

Commenting on Lloyd’s of London’s role in the insurance sector during turbulent economic times, Neal added: ”Insurance is a product made for uncertain times – and with the macro environment remaining as volatile as before, our industry has continued to innovate and adapt to braver decision making. 

“Our results represent our market’s best underwriting performance since 2007 and our strategic initiatives continue to drive us towards a more efficient, sustainable and inclusive market.”