Lloyd’s reports H1 COR of 91.4%, despite Ukraine loss reserving

Lloyd’s has announced an improved underwriting result for the first six months of 2022, with an underwriting profit of £1.2 billion (compared to £0.96 billion for the first half of 2021) and a combined ratio of 91.4% (HY 2021: 92.2%).

Notwithstanding a challenging year of natural catastrophes, the invasion of Ukraine, inflation, and other geopolitical factors, this marks a 0.8% improvement on 2021 and the strongest combined ratio since 2015.

Lloyd’s reported an overall loss of £1.8 billion (HY 2021: £1.4 billion profit) driven by a net investment loss of £3.1bn (HY 2021: £0.6bn income) from unrealised mark-to-market losses.

Lloyd’s CEO John Neal, commented: ”Lloyd’s results today point to both the sustainable performance of our market and the resilience of our capital position, enabling us to continue supporting customers through whatever lies ahead.

”Rising interest rates, while prompting an unrealised investment loss on paper at the half year, will be good news for insurers in the long term as returns on assets strengthen in 2023 and beyond.

”Meanwhile, with the conflict in Ukraine continuing to inflict devastating consequences, we’ve taken proactive steps to protect our customers from the fallout while ensuring we can support them – and continue driving sustainable performance – through the uncertain times ahead.”

The market has reserved £1.1 billion net of reinsurance for customers impacted by the conflict in Ukraine.

Lloyd’s continues to work with governments and regulators around the world to deliver sanctions against Russia, while implementing the landmark facility announced by our market in July to insure ships recovering grain from Ukraine’s ports.

Lloyd’s capital and solvency positions remain strong with net resources at £36.5 billion (down marginally from £36.6 billion at year-end 2021).