Lloyd’s has rebounded to report a half-year profit as rising premiums and fewer major catastrophes drove an improved underwriting result and the investment performance turned around.
Profit before tax was £3.92 billion ($7.67 billion) in the half, compared to a year-earlier loss of £1.8 billion ($3.52 billion) and the market says it’s on track to deliver on its full-year growth, underwriting and investment outlook.
“All in all, it was a strong six months for Lloyd’s,” CEO John Neal said. “Our balance sheet is both profitable and resilient and our strategic initiatives continue to drive us towards a more efficient, sustainable and inclusive market.”
Gross written premium (GWP) increased 21.9% to £29.31 billion ($57.33 billion), with record revenue driven by price and volume growth. Reinsurance GWP surged to £11.17 billion ($21.8 billion) from £9.27 billion ($18.1 billion) and property jumped to £7.91 billion ($15.44 billion) from £5.69 billion ($11.11 billion).
The underwriting profit rose to £2.5 billion ($4.9 billion) from £1.22 billion ($2.39 billion), with the combined operating ratio improving to 85.2% from 91.4%.
“Major claims represented 3.6% of losses in the first half of 2023, marking a relatively light period for catastrophe losses but giving us the necessary resilience for the traditionally catastrophe-heavy second half of the year,” Mr Neal said.
The market reported a net investment gain of £1.81 billion ($3.54 billion) compared to a £3.12 billion ($6.1 billion) loss a year earlier.
Regional Head of Australia and New Zealand Chris Mackinnon says Lloyd’s half-year report doesn’t focus in on country level results, but he pointed to local momentum, and the positive overall performance of the market.
“I can say that the premium growth in Australia in the first half of 2023 has continued, and is in line with the overall Lloyd’s position,” he told insuranceNEWS.com.au.
“Although we are only half-way through the year, these very positive results provide a platform to spur us on to execute our plans and drive growth through 2023 and into 2024.”