The non-life syndicates that make up the Lloyd’s market reported an underwriting profit of £1.2 billion for 2021, according to the latest analysis of individual syndicate accounts by market intelligence firm Insurance DataLab.
This represents a £3.3 billion improvement on the previous year when the market was dogged by claims in the wake of the Covid-19 pandemic, particularly business interruption claims stemming from government-imposed lockdowns.
Gross written premium (GWP) has also been on the rise again after falling by 5% in 2020. The Lloyd’s market reported GWP totalling just under £25 billion for 2021–up 13% on the £22.2 billion brought in over the course of 2020.
The market’s performance was buoyed by a 24% reduction in gross claims to £13.5 billion, down from £17.7 million in 2020. This also takes claims back below 2019 levels when Lloyd’s reported gross claims of £15.3 billion.
Property insurance was the Lloyd’s market’s top performing business line, reporting a £510.2 million underwriting profit for 2021. This is a marked turnaround, Insurance DataLab said, from the previous year when it reported an aggregate underwriting loss of £504.7 million.
Much of this change is due to a reduction in claims, with gross property claims falling by a fifth to £4.3 billion. Of the seven main business lines that make up the Lloyd’s market, only third party liability failed to turn a profit as it reported an underwriting loss of £33.8 million for 2021, although was still much improved from the £475.9 million loss from the previous year.
This is in sharp contrast to 2020 when all but two of the main business lines reported an underwriting loss.
Insurance DataLab co-founder Matt Scott said: “The Lloyd’s market has bounced back strongly from the Covid-19 pandemic, buoyed by falling claims and significant rate increases across many business lines.
“These rate increases have slowed since the beginning of the year, however, and some lines are now seeing their lowest increases since the third quarter of 2019. This, combined with ongoing claims inflation fuelled by the global supply chain crisis, will be of concern to syndicates, and controlling claims costs and operating expenses will be a key battleground for the industry over the coming months.”
Insurance DataLab is a market intelligence and research service, focusing on the performance of insurers, Lloyd’s Syndicates, MGAs and brokers based in the UK and Gibraltar.
Lloyd’s, Insurance DataLab