Major losses - including the conflict in Ukraine and Hurricane Ian in the US - contributed 12.7% to the combined ratio

Lloyd’s has posted a gross loss of £800m for full year 2022, after revealing the market as a whole paid out over £21 billion to customers in a year that saw major losses contribute 12.7% to the combined ratio, including substantial claims from the conflict in Ukraine and Hurricane Ian in the US.

The market made an underwriting profit of £2.6 billion and posted a healthy combined ratio of 91.9% – a 1.6 percentage point improvement and the strongest result since 2015. Gross written premiums climbed to £46.7 billion, up from £40 billion the previous year.

With prices increasing by 8%, the Lloyd’s market has now seen 20 consecutive quarters of positive price improvement. 

“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,” said Lloyd’s CEO John Neal.

”Looking to 2023, Lloyd’s expects strong premium growth to around £56 billion, a combined ratio below 95% and a total investment yield on our assets of more than 3% – enabling us to support customers through the uncertain times ahead.”

Cost of doing business comes down

The attritional loss ratio improved again to 48.4%, while the expense ratio improved by 1.1 percentage points to 34.4%.

Mark-to-market accounting rules on fixed income investments led to an overall loss of £800m, however this loss is expected to reverse in the coming years as assets reach maturity and benefit from favourable interest rates. 

Lloyd’s capital and solvency position has strengthened, with a central solvency and market-wide solvency ratio of 412% and 181% respectively (2021: 388% and 177%). Net resources stood at £40.2 billion.