In a Press release, the material turnaround in performance was credited to the Lloyd’s market’s focus on underwriting profitability, and its leveraging of favourable trading conditions to achieve premium growth. Premium rates rose by 10.9%, continuing the trend of 16 consecutive quarters of positive rate movement.
Lloyd’s highlighted that, in 2021, it continued to provide substantial support to its customers around the world, paying £19.9 billion of gross claims in the year and £2.9 billion to customers impacted by COVID-19 (representing 86% of claims notified to date).
The 16.9% improvement in its combined ratio against a year of heightened natural catastrophe activity, was emphasised by Lloyd’s as testament to its continued focus on achieving sustainable, profitable performance. This focus was credited with resulting in a further 3.0% reduction in attritional loss ratio to 48.9% (2020: 51.9%).
Lloyd’s noted that its capital and solvency position is very strong and continues to build while its focus on sustainable performance and investment in digitalisation through its Blueprint Two programme is designed to continue to drive down expenses.
In the release, Lloyd’s touched on the ongoing conflict in Ukraine and noted this will be a major claim to the market in 2022. The marketplace is in close dialogue with market partners to understand exposures, it said. Business underwritten by the Lloyd’s market in Ukraine, Russia and Belarus currently represents less than 1% of its global footprint, and direct and indirect claims are expected to fall within manageable tolerances and will not create solvency challenges.
Lloyd’s continues to work in lockstep with governments and regulators around the world to support and implement a complex series of sanctions on the Russian State.
In his comments on the full-year results, Lloyd’s CEO John Neal said that the organisation’s thoughts are first and foremost with the people of Ukraine. In a world impacted by increasingly complex and connected risks, he said, the Lloyd’s market is standing by its customers and supporting their recovery when things go wrong.
“Against this backdrop, I’m pleased to see the market return to profitability following the decisive action taken in recent years to improve performance,” he said. “The market’s underwriting discipline will enable sustainable profitability in the years to come, coupled with a balance sheet that can support our ambition to grow profitably.”