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 a £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’.

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.