Lloyd’s reported a profit before tax of £2.3 billion ($4.04 billion) last year, an improvement from the £900 million ($1.58 billion) loss incurred in 2020 as the business focused on underwriting profitability and leveraged favourable trading conditions to achieve premium growth.

The business achieved an underwriting profit of £1.7 billion ($2.98 billion), compared with a year-earlier loss of £2.7 billion ($4.74 billion).

Lloyd’s General Representative in Australia Chris Mackinnon says the business here performed strongly last year, registering a near 13% rise in gross written premium (GWP) to $3.4 billion.

In 2019 and 2020, Lloyd’s achieved about $3 billion in GWP in the Australian market.

“We’ve bounced back and we’ve got stronger again in 2021,” Mr Mackinnon told insuranceNEWS.com.au today.

He says the group-wide 2021 results, announced overnight in London by Lloyd’s, represent the culmination of many years of hard work by the market and the corporation.

“All of the work that we’ve done to remediate the underlying underperforming business in the market has come to fruition,” Mr Mackinnon said.

Lloyd’s says it paid about £19.9 billion ($34.9 billion) in gross claims last year and £2.9 billion ($5 billion) to customers impacted by covid from 86% of claims notified to date.

GWP increased to £39.2 billion ($68.9 billion), up from £35.5 billion ($62.4 billion) in 2020 and the combined ratio improved to 93.5% from 110.3%.

Lloyd’s says the underwriting profit of £1.7 billion includes the impact of major claims and benefit from prior year releases.

Major claims contributed 11.2% to the combined ratio, significantly less than the 23% in 2020, as both the severity and frequency of events were reduced last year.

“[Last year] saw the Lloyd’s marketplace return to both growth and profitability,” CEO John Neal said. “Importantly, we delivered on our promise to return the market to sustainable underwriting profit.

“These results evidence our continuous improvement and portfolio management approach in action and position the market for sustainable and profitable growth in the years ahead.”

On the ongoing conflict in Ukraine, Lloyd’s warns the event will be a major claim to the market in 2022 and that it is in close dialogue with market partners to understand exposures.

It says business underwritten by the Lloyd’s market in Ukraine, Russia and Belarus currently 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 continues to work in lockstep with governments and regulators around the world to support and implement a complex series of sanctions on the Russian State.”