Forecasts & Results

Lloyd’s 2023 Interim Results

Posted 07/09/2023 – Quick takes

Lloyd’s has announced a strong set of results for the first six months of 2023, with an underwriting profit of £2.5bn (HY 2022: £1.2bn), an investment return of £1.8bn (HY 2022: £3.1bn loss) and a profit before tax of £3.9bn (HY 2022: loss of £1.8bn).

HY22 £bn HY23 £bn
Gross written premiums 24.0 29.3
Underwriting result 1.2 2.5
Investment income -3.1 1.8
Pre-tax profit/(loss) -1.8 3.9
Combined ratio 91.4% 85.2%
Central Solvency Ratio 395% 438%
Market-wide Solvency Ratio 181% 194%


The market’s combined ratio improved 6.2 percentage points to 85.2% (HY 2022: 91.4%) demonstrating continued progress in underwriting performance.


Lloyd’s continued to support profitable underwriting growth, with gross written premium increasing 21.9% to £29.3bn driven by growth from existing syndicates (+6.5%), new syndicates (+2.2%), foreign currency movements (+4.1%) and risk-adjusted rate increases (+9.1%). Major claims represented 3.6 percentage points of the combined ratio, down from 9.9% HY 2022. However, the attritional loss ratio increased by 2.0 points, to 50.9%. The half year saw a number of global major losses including the Turkish earthquake, several wildfires and convective storms but most of these were relatively small to Lloyd’s, demonstrating good risk management, but possibly impacted the attritional rather than major loss ratio. The prior years released 4.7%, up from 2.8% HY 2022. This was explained as coming particularly from the casualty classes, where some Loss Portfolio Transfers (to the RITC market) enabled some surplus to be released.


Lloyd’s balance sheet continued to strengthen with a central solvency ratio of 438% and market-wide solvency ratio of 194%, showing the market’s capital discipline and resilience through a range of market conditions.


John Neal reported “We’re pleased to be reporting a strong set of results for the year so far – with profitability in both our underwriting and investments; a leading combined ratio, strong premium growth and a bulletproof balance sheet that means we can support customers through a range of shocks and scenarios. Combined with the market’s progress in driving sustainable performance, digitalisation and showing leadership from climate transition to culture change – these results set us up to deliver on our positive financial outlook for 2023.”


Alpha comment

These are as described strong half year numbers for the market and demonstrate resilience as we head into the second half of the year which will be inevitably impacted by levels of US windstorm activity. The market is reporting very strong pricing in both property and reinsurance classes together with positive rate movements in all other classes other than casualty which was reported to be flat. That said, D&O rates are reported to be -20% which Lloyd’s felt did not properly reflect exposures being run and Cyber rates were reported to be flat which felt more optimistic than we have heard across the market. These aggregated to a positive rate increase of +9.1% for the first half year. John Neal reported that the 85.2% first half year combined ratio was the best number for the market  in decades. The prior years are showing good releases, including from the casualty sector, which confirms that the market continues to be well-reserved. AM Best recently upgraded its outlook for Lloyd’s from ‘stable’ to ‘positive’ which also helps confirm the market’s perceived strength. Looking ahead, Lloyd’s believes that the market is on track to deliver its full year target of gross written premiums of £56bn, a combined ratio of  less than 95% and a  greater than 3% investment return. The half year results suggest this looks comfortably achievable, but as we are all aware the hurricane season is just underway so the ultimate outcome for the full year is yet to be determined.

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