Lloyd’s of London said profit jump in 2023 as the market escaped large insurance losses and benefited from higher returns on its investment portfolio.
Lloyd’s also recorded its third straight year of premium growth, with gross premiums written jumping 11.6 per cent to £52.1bn. The expansion came from both pricing and volume growth. Higher premiums added seven per cent, while volumes added four per cent.
Lloyd’s of London also benefited from higher returns on its investment portfolio last year due to higher interest rates. The market reported total capital, reserves, and subordinated loan notes of £45.3bn at the end of 2023, up 12.7 per cent year-on-year. It earned £5.3bn on the reserves in 2023.
Including investment returns, Lloyd’s of London’s overall profit before tax hit £10.7bn in 2023, a vast improvement on the £0.8bn loss reported for 2022.
The market reported a combined ratio, which shows costs and losses as a percentage of premiums, of 84 per cent for 2023, compared to 91.9 per cent for 2022.
However, despite the improved combined ratio, the market’s efforts to drive costs down seem to have stalled. The expense ratio remained flat year-on-year at 34.4 per cent.
John Neal, CEO of Lloyd’s of London, said: “The results we’re reporting today are our best in recent history, with an outstanding underwriting result underpinned by a strong and resilient balance sheet. Our ability to attract – and provide returns on – capital is vital to ensuring we can support our customers through uncertainty.
“We’ll continue working with our market to deliver consistent profitable performance through disciplined underwriting – enhancing the value, relevance and long term sustainability of Lloyd’s.”