In a trading update published on 8 March 2023, Lloyd’s has provided detail on the market’s performance in 2022 ahead of the full year results to be published on 23 March.

Premium income

Overall market premium income is up more than 19% to £46 billion. The increases are a combination of price increases (8%), foreign exchange (8%) and organic growth (3%).

Combined ratio

The underwriting performance continues to improve, with the market combined ratio (the ratio of claims and expenses to premium income) falling to 91.9% from 93.5% in 2021. A combined ratio of less than 100% indicates that the insurer is making money from its underwriting operations, and at less than 92%, the market is delivering an underwriting profit of 8p for every £1 of premium income.

Major losses

There was significant insured loss in the year, with the market bearing claims from Hurricane Ian and the conflict in Ukraine. Major losses added 12.7% to the market combined ratio, up on the  11.2% of premium in recorded in 2021.

Expenses and attrition

There was a further improvement in the expense ratio (administration and acquisition costs as a proportion of premium income), which fell from 35.5% to 34.4%. The remaining part of the combined ratio relates to attritional losses and releases from reserves. The attritional loss ratio, which relates to smaller and medium sized losses which are not attributed to a major loss event, improved to 48.4% from 48.9%.


Despite an increase in provision for inflation, movement on reserves held for older years improved the loss ratio by 3.6%, an increase on the contribution of 2.1% in 2021.


The investment markets were volatile in 2022, with the increase in interest rates reducing the value of fixed income bond portfolios. In aggregate the market has reported a loss of approximately £3bn from investments, which will make the overall market result for the year a loss of £800m.

Argenta comment

These are really strong underwriting results, especially in the light of the catastrophe activity in the year, alongside the Russian invasion of Ukraine. Hurricane Ian is currently the second most expensive insurance loss in history. They auger very well indeed for the coming few years of underwriting returns.  It is disappointing that the headline number will be an overall loss, driven by mark to market losses on the investment portfolios. In practical terms, the investment loss is simply a timing issue – bond portfolios fall in value when interest rates increase, but the increased interest rates will benefit subsequent years.