Lloyds of London handed out £21 billion (€23.7bn) to customers as claims from Ukraine contributed to the firm slumping to a loss for the past year. The world’s largest insurance exchange also marked down the value of its bonds following the sharp uptick in interest rates.
On Wednesday Lloyds revealed a pretax loss of £769 million in 2022, dropping from a £2.3 billion profit a year earlier.
The insurance market paid out over £21 billion to customers during the year as it witnessed “substantial claims from the conflict in Ukraine and Hurricane Ian in the US”. It added that it had to set aside £1.4 billion of cash reserves to deal with unforeseen events during the year, such as the invasion of Ukraine by Russia.
Lloyds tabled the loss after valuation losses on investments more than offset positive underwriting figures.
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The group said it had seen an underwriting profit of £2.6 billion, increased from £1.7 billion in 2021. However, it also reported a net investment loss of £3.1 billion due to the impact of market uncertainty on its investments.
John Neal, chief executive officer of Lloyds, said: “This is an outstanding underwriting result that follows several years of performance improvement, a comprehensive plan to digitalise our market, steady and sustained progress on our culture and purposeful action to help our industry and society manage the biggest challenges of our time.
“Looking to 2023, Lloyd’s expects strong premium growth to around £56 billion, a combined ratio below 95 per cent and a total investment yield on our assets of more than 3 per cent – enabling us to support customers through the uncertain times ahead.” – PA