Lloyd’s, one of the biggest single marketplaces for marine insurance and reinsurance, has posted a big jump in 2023 earnings as the cost of claims fell.

The London group said it had achieved solid profitability on both the underwriting and investment sides, with a strong balance sheet.

Net profit rose to £268m ($338m), up from £98m in 2022.

The gross written premium was £52.1bn, up from £46.7bn, with an underwriting profit of £5.9bn, against £2.6bn in 2022.

The latter contributed to a 7.9% improvement in the combined ratio to 84%, the strongest result since 2007.

Underwriting benefited from lower costs from large risks and natural catastrophe claims.

Chief executive John Neal said the results were the 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,” he added.

“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 CEO said.

The gross written premium was driven by volume growth of 4%.

Price increases

With price increases of 7% offsetting inflationary trends, the Lloyd’s market has now seen 24 consecutive quarters of positive price improvement, the group said.

Lloyd’s added that the drive to improve performance and reduce the cost of doing business has resulted in a further 0.1% reduction in the attritional loss ratio to 48.3% from 48.4%.

Investment returns came in at £5.3bn, turning around a £3.1bn loss in 2022.

This was boosted by higher risk-free interest rates and the unwinding of the previously booked mark-to-market loss.

The group had total capital, reserves and subordinated loan notes of £45.3bn, versus £40.2bn the year before.

Earlier in March, Lloyd’s said it had achieved its short-term target of 35% of leadership positions held by women.

Figures also showed that 21% of new hires in the past year had come from an “ethnically diverse background”.

Lloyd’s cited an increase in wider inclusivity policies and practices, such as menopause support and drugs and alcohol policies.

Neal has been attempting to modernise the business culture at Lloyd’s after it attracted some negative headlines.

In 2020, Lloyd’s came under fire from the Black Lives Matter movement for its historic role in the slave trade.

It has also come under scrutiny for its business culture.

In 2022, Lloyd’s fined Atrium Underwriters more than £1m due to “serious failures” by the firm over discrimination, harassment and bullying.

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