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Lloyd's of London on Thursday said it made a big swing back into profit last year, but the insurance market warned that the conflict in Ukraine ‘will be a major claim to the market in 2022’.
Lloyd's said it swung to an overall profit of £2.3 billion in 2021 from a £900 million loss in 2020, as an 11% rise in premium rates lifted underwriting profitability.
The market's combined ratio improved to 93.5% last year from 110.3% in 2020. A ratio below 100% indicates profitable underwriting, so the lower the better. Lloyd's noted that its combined ratio in 2020 was 97.0% excluding Covid-19 pandemic claims.
The insurance market said it is speaking with partners to understand exposures to the war in Ukraine. It said business underwritten in Ukraine, Russia and Belarus represents less than 1% of its global footprint.
‘Direct and indirect claims are expected to fall within manageable tolerances and will not create solvency challenges,’ Lloyd's said.
Lloyd's said its capital and solvency position is ‘very strong’ and continues to build. Net resources increased to £36.6 billion, up 8.0% from £33.9 billion from a year before. It reported central and market solvency ratios of 388% and 177%, respectively, up from 209% and 147% a year ago.
‘In a world buffeted by increasingly complex and connected risks - from the pandemic to a geopolitical conflict - the Lloyd's market is standing by its customers and supporting their recovery when things go wrong,’ said Chief Executive Officer John Neal.
Lloyd's said it paid out £19.9 billion in gross claims in 2021. It also has paid £2.9 billion to customers hurt by Covid-19.
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