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8 August 2023

Lloyd’s Underwriting Profits on the Rise Despite Jump in Claims

All business lines reported an underwriting profit for 2022, with third party liability the most profitable with an underwriting result of £580.2m after falling to a £36.3m loss in 2021

The Lloyd’s market reported an underwriting profit of more than £1.5bn for 2022, a 29% increase on the previous year as its profitable resurgence continues following a period of unprofitability in the wake of the Covid-19 pandemic. 

This increase in underwriting profits comes despite a 41% increase in gross claims incurred, which was largely driven by a jump in marine, aviation and transport (MAT) claims. 

Claims for this business line rose by more than 79% as it broke through the £3bn barrier and underwriting profits fell by almost two-fifths to £311.4m.  

This compares to an underwriting profit of £590.8m in 2021 when it was the second most profitable business line behind property insurance with an underwriting profit of £525.2m. 

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

This increase in performance comes despite a 29% increase in gross claims to £7.5bn, which was offset by a corresponding increase in premiums. 

Third party liability continues to be the largest business line, accounting for 39% of the total market with GWP totalling £12.3bn for 2022. Property insurance is close behind with GWP of £10.6bn, equal to 34% of total market premiums. 

As well as being the largest line of business at Lloyd’s, third party liability insurance was also the most profitable after it reported an underwriting profit of £580.2m. This compares to an underwriting loss of £36.3m in 2021. 

Performance was boosted by an improving reinsurance position, which saw fewer net premiums ceded to reinsurers, and a reduction in expenses relative to the overall premium base. 

Pecuniary loss was the other business line to return to underwriting profit after an unprofitable 2021, reporting an underwriting result of £37.5m for 2022. This is up from a loss of £10.9m the previous year. 

This means that every business line at Lloyd’s reported a profitable 2023, with only three business lines – property, MAT and other – reporting a worsening underwriting position over 2022. 

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