Controlling claims costs and operating expenses will soon become a “key battleground” for the market, says co-founder
The non-life underwriting syndicates that make up the Lloyd’s market reported an underwriting profit of £1.2bn for 2021, according to the latest analysis of individual syndicate accounts by market intelligence firm Insurance DataLab (IDL).
This combined figure represents a return to profit for the Lloyd’s market and a £3.3bn improvement from the previous year – in 2020, Lloyd’s syndicates posted a combined loss of £2.1bn.
The syndicates’ combined gross written premium figure also rose in 2021 – it reached £25bn in 2021, increasing by 13% from the £22.2bn brought in during 2020.
IDL’s analysis noted that the market’s performance was supported by a 24% reduction in gross claims to a value of £13.5bn, down from £17.7m in 2020.
The analysis also identified property insurance as the market’s top performing business line, with a combined underwriting profit of £510.2m in 2021. This was a significant improvement on the previous year’s figure, when the line posted an aggregate underwriting loss of £504.7m.
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This improvement was driven by a reduction in property claims, with the total value of these falling by 20% to £4.3bn.
Of Lloyd’s of London’s seven main business lines, only third party liability insurance failed to turn a profit – it reported an underwriting loss of £33.8m in 2021. Despite this, the figure represented an improvement from the £475.9m loss the line saw in 2020.
Key battleground
IDL co-founder Matt Scott said: “The Lloyd’s market has bounced back strongly from the Covid-19 pandemic, buoyed by falling claims and significant rate increases across many business lines.
“These rate increases have slowed since the beginning of the year, however, and some lines are now seeing their lowest increases since the third quarter of 2019.”
“This, combined with ongoing claims inflation fuelled by the global supply chain crisis, will be of concern to syndicates and controlling claims costs and operating expenses will be a key battleground for the industry over the coming months”.
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