Lloyd’s announces 91.9% combined ratio for 2022

Lloyd’s has reported a combined ratio of 91.9% for its syndicates in 2022. Gross Written Premium (GWP) increased by more 19% to above £46bn, compared with £39.2bn in 2021. Lloyd’s said that this reflected a combination of growth from the strong US dollar (8%), direct price increases (8%) and organic growth (3%).

The underwriting performance improved by more than expected, falling by 1.6 percentage points to enable a combined ratio of 91.9. This was despite major claims contributing 12.7pp, including losses arising from the conflict in Ukraine and from Hurricane Ian in Florida.

The attritional loss ratio improved to 48.4% (FY 2021: 48.9%), while prior year releases were 3.6% (FY 2021: 2.1%). The expense ratio was reduced to 34.4% (FY 2021: 35.5%).

Rising interest rates on fixed income portfolios forced a write down of asset values, although it will lead to higher yields and investment returns in future years. Therefore the IFRS reported investment loss of approximately £3bn (FY 2021: £0.9bn income) is in line with the result reported at the half year.

Lloyd’s noted that “the investment loss has no cash impact, and is expected to be reversed out over the next two to three years as the assets reach maturity”.

The investment loss will cause a full year loss before tax of approximately £0.8bn (FY2021: profit £2.3bn).

The full year results will be released on March 23rd, accompanied by guidance on expectations for FY2023.