Marking a significant milestone, the market recorded an underwriting profit of £5.9 billion for the fiscal year 2023, a notable surge from £2.6 billion in the previous year. This substantial increase contributed to an impressive 7.9 percentage point enhancement in the combined ratio, reaching 84.0%, the strongest performance since 2007. Underwriting gains were buoyed by reduced costs from major risks and natural catastrophe claims, leading to an underlying combined ratio of 80.5%.
Lloyd’s achieved its third consecutive year of double-digit growth, witnessing an 11.6% rise in gross written premium to £52.1 billion, propelled by a 4% increase in volume. The market sustained positive price improvement for 24 consecutive quarters, with a 7% increase offsetting inflationary pressures.
Efforts to bolster performance and streamline operations at Lloyd’s yielded a 0.1% reduction in the attritional loss ratio to 48.3%, while the expense ratio remained steady at 34.4%.
Investment returns soared to £5.3 billion, a significant turnaround from the previous year’s £(3.1) billion loss, driven by higher global risk-free interest rates and the unwinding of previously recorded mark-to-market losses. Consequently, Lloyd’s reported an overall profit before tax of £10.7 billion, in stark contrast to the £(0.8) billion loss recorded in the prior fiscal year.
The market’s resilience was underscored by its robust balance sheet, supporting central and market-wide solvency ratios of 503% and 207% respectively, marking notable increases from the previous fiscal year. Total capital, reserves, and subordinated loan notes surged by 12.7% to £45.3 billion.
These achievements were recognized by leading credit rating agencies, with S&P Global upgrading Lloyd’s market outlook from A+ stable to AA- stable, and A.M. Best revising the outlook to positive, reflecting the market’s sustainable profitability and resilient capital position.
John Neal, CEO of Lloyd’s, 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.”
The key figures reported in Lloyd’s 2023 Full Year results are:
- Gross written premium of £52.1bn (2022: £46.7bn)
- Underwriting profit of £5.9bn (2022: £2.6bn)
- Combined ratio of 84.0% (2022: 91.9%)
- Profit before tax of £10.7bn (2022: £(0.8)bn loss)
- Attritional loss ratio of 48.3% (2022: 48.4%)
- Net investment return of £5.3bn (2022: £(3.1)bn loss)
- Total capital, reserves and subordinated loan notes of £45.3bn (2022: £40.2bn)
- Central solvency ratio of 503% (2022: 412%)
Source: Lloyd’s
