Lloyd’s of London improves underwriting profit despite jump in claims

Lloyd’s of London grew its underwriting profit by nearly 30% in 2022 despite a jump in claims, a new analysis published today (8 August 2023) has revealed.

Insurance DataLab revealed that 2022 saw the marketplace incurr a 41% year-on-year increase in gross claims, which was largely driven by the marine, aviation and transport (MAT) sector.

However, it said the Lloyd’s market reported an underwriting profit of more than £1.5bn last year, a 29% rise from 2021, following a period of unprofitability in the wake of the Covid-19 pandemic.

And gross written premium (GWP) across all business lines rose by more than a quarter to £31.3bn – up from a little under £25bn the previous year.

Insurance DataLab co-founder Matt Scott said: “It is great to see the Lloyd’s market continuing to improve its underwriting profitability, as well as its overall premium base.”

Business lines

Insurance DataLab said Lloyd’s performance in 2022 was boosted by an improved reinsurance position, which saw fewer net premiums ceded to reinsurers, and a reduction in expenses relative to the overall premium base.

It added that in turn, all business lines reported an underwriting profit during the year.

Third party liability was the largest business line, accounting for 39% of total market premiums (£12.3bn).

It also secured an underwriting profit of £580.2m in 2022, compared to a loss of £36.3m in 2021.

Meanwhile, property insurance was the second largest business line, securing 34% of total market premiums.

Despite improved performance across the market, Insurance DataLab warned that it will continue to face inflationary pressures that saw gross claims rise.

“We anticipate reinsurance continuing to be a vital tool in managing these increased costs as we move through 2023,” Scott added.