Lloyd's claims payouts top $38 billion, but GWP to rise

Lloyd’s claims payouts top $38 billion, but GWP to rise

27 March 2023

Lloyd’s is expecting gross written premium (GWP) of about £56 billion ($103 billion) this year after booking a 19.1% rise to £46.7 billion ($85 billion) last year.

The business released its 2022 financial results last week and, as was flagged in a preliminary update, it made a pre-tax loss of £800 million ($1.4 billion) due to “mark-to-market” investment losses.

But it achieved an underwriting profit of £2.6 billion ($4.8 billion), up from £1.7 billion ($3.1 billion) in 2021 despite “substantial” claims from the conflict in Ukraine and Hurricane Ian in the US.

Lloyd’s says it paid out £21 billion ($38.7 billion) in claims last year. Major claims include natural catastrophe losses such as hurricanes Ian and Fiona, the Australian floods as well as non-natural catastrophe losses such as those arising from the conflict in Ukraine.

“This is an outstanding underwriting result that follows several years of performance improvement, a comprehensive plan to digitalise our market, steady and sustained progress on our culture and purposeful action to help our industry and society manage the biggest challenges of our time,” CEO John Neal said.

“Looking to 2023, Lloyd’s expects strong premium growth to around £56 billion.”

Lloyd’s annual report says the business demonstrated a “high degree of responsiveness” to unforeseen events last year, including the invasion of Ukraine.

It set aside £1.4 billion ($2.6 billion) of reserves as at December, compared with £1.1 billion ($2 billion) on June 30.

“The resilience built into the market through a number of years of remediation, and our resultant strong underlying performance, has enabled us to respond quickly and effectively to these challenges,” the annual report says.

It says Hurricane Ian and the conflict in Ukraine both remain manageable events for the market.