The Lloyd’s of London insurance marketplace has allocated another £300 million for Ukraine-related claims. This brings the total wartime claims bill to £1.4 billion.
Full-year results for 2022 revealed that the organisation suffered a loss of £769 millions. This was despite a stellar underwriting performance. However, it was overshadowed in part by high mark-to-market losses in its investment portfolio. This loss is compared to the 2021 pretax profit of £2.28 trillion.
Lloyd’s was forced to record £3.13 billion losses last year due to falling equity and bond markets. These were non-cash accounting loss and, at the minimum, they would be reversed over the next two to three years once the assets mature.
After Lloyd’s had set aside £1.1 million for the half-year, it said that it believed that claims related to the conflict would be small and not as high as the cost of a major hurricane that struck the American east coast. Expected claims will range from direct damage to seized assets like aircraft, supply chain disruptions due to war-related disruptions and western sanctions. Credit defaults are also possible.
Lloyd’s was very proud of its underwriting performance. They stated that underwriting profit jumped from £1.74 billion up to £2.64 trillion.
John Neal, chief executive, said that the combined ratio dropped from 93.5 percent to 91.9 percent, which was a “fantastic”, and the best performance since 2015. This ratio, which includes claims and expenses plus a percentage of premiums, is considered a key indicator of performance. Anything below 100 percent is considered a profit.
Lloyd’s can trace its roots back to Edward Lloyd’s café by the Thames in 1652. It has grown into the largest specialist insurance market in the world. It currently employs approximately 2,000 people directly, and 35,000 through brokers and syndicates.
Neal stated that “2022 was another year of strong underwriting results and continued progress for our market.” This is after five years of hard work and dedication to improve our performance, culture, and digital transformation.
According to Lloyd’s, Hurricane Ian was the most expensive weather event of the year. Hurricane Ian struck Florida in September last year, killing at most 160 people and causing damage of up to $113 billion. Lloyd’s also suffered other costly hits like Hurricane Fiona in Florida and the flooding in Australia.
Neal received a 30% increase in his total salary to £2.085 million.