Lloyd’s, the world’s leading marketplace for insurance and reinsurance, today announces its Full Year 2023 financial results (FY2023), which demonstrate solid profitability on both the underwriting and investment sides, and a strong balance sheet.
The market delivered an underwriting profit of £5.9bn (FY2022: £2.6bn) – a £3.3bn increase on the previous year. This contributed to a 7.9 percentage point improvement in the combined ratio to 84.0% (FY2022: 91.9%) – the strongest result since 2007. Underwriting benefited from lower costs from large risks and natural catastrophe claims, with the underlying combined ratio (combined ratio excluding major claims) of 80.5% (FY2022: 79.2%).
Lloyd’s delivered a third consecutive year of double-digit growth, with the market’s gross written premium increasing by 11.6% to £52.1bn (FY2022: £46.7bn), driven by volume growth of 4%. With price increases of 7% offsetting inflationary trends, the Lloyd’s market has now seen 24 consecutive quarters of positive price improvement.
The drive to improve performance and reduce the cost of doing business at Lloyd’s has resulted in a further 0.1% reduction in the attritional loss ratio to 48.3% (FY2022: 48.4%), with the expense ratio remaining flat at 34.4% (FY2022: 34.4%).
Investment returns of £5.3bn (FY2022: £(3.1)bn loss), driven by higher risk-free interest rates around the world and the unwind of the previously booked mark-to-market loss, contributed to an overall profit before tax of £10.7bn (FY2022: £(0.8)bn loss).
A strong and resilient balance sheet has supported central and market-wide solvency ratios of 503% and 207% respectively (FY2022: 412% and 181%), with total capital, reserves and subordinated loan notes increasing 12.7% to £45.3bn (FY2022: £40.2bn).
Lloyd’s sustainable profitability and resilient capital were reflected in S&P Global upgrading the Lloyd’s market from A+ (strong) stable outlook to AA- (very strong) stable outlook, and A.M. Best boosting the market’s outlook to positive (previously stable outlook).