Insurance market Lloyd’s of London toasts best result ‘in recent history’ with £10.7bn profit

Lloyd’s of London has achieved its strongest annual results ‘in recent history’ after swinging to a bumper profit from a loss the prior year. 

The world’s biggest insurance marketplace, whose roots date back to a 17th-century coffee house, rebounded to a £10.7billion profit last year after making an £800million pre-tax loss in 2022. 

It credited the performance to higher interest rates and an ‘unwind of the previously booked mark-to-market loss’.

Recovery: Insurance marketplace Lloyd’s of London, whose roots date back to a 17th-century coffee house, rebounded to a £10.7billion profit last year

In the group’s underwriting arm, its profits swelled from £2.6billion to £5.9billion due to falling costs from large risks and natural catastrophe claims.

This helped boost the company’s combined ratio – the difference between written premiums and payouts – by nearly eight percentage points to 84 per cent, its highest level for 16 years.

A ratio below 100 per cent denotes a profit, while any figure above that number represents a loss.

Gross written premiums at Lloyd’s totalled £52.1billion, an 11.6 per cent increase on the previous year and its third consecutive year of double-digit growth.

John Neal, chief executive 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.’

In the past few years, the insurance market has doled out billions in claims related to the Ukraine war, especially for aircraft stranded in Russia.

It has also taken losses from a significant number of extreme weather events; in 2023, these included the Turkey-Syria Earthquake, Hawaii’s August wildfires, and Cyclone Gabrielle in Oceania.

Lloyd’s of London’s results come a few weeks after two of its insurers, Beazley and Hiscox, both reported record annual profits and launched major share buybacks.

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