But the report also noted that efforts to improve the stability and credibility of the Lloyd’s market in recent years have borne fruit. An analysis of the distribution of individual syndicate underwriting performance found that the majority managed to hit a sub 100% combined ratio in 2021, and the general spread of performance across the market over the past 10 years had narrowed towards a profitable result versus previous years, Gallagher Re said.
“Lloyd’s made great progress in 2021, particularly in view of the natural catastrophe burden that hit the market. A relentless effort to improve syndicates’ performance has led to satisfactory results, which bolster the market’s sustainability and its credibility,” said Gallagher Re CEO Tom Wakefield.
The report also broke down Lloyd’s profit and loss since 2011, finding that while there was a period of recent volatility and increased risk, there was also a significant turnaround in underwriting performance despite reduced investment returns.
“Lloyd’s steadily decreasing attritional loss ratio points to the positive performance impact of portfolio remediation and rate increases,” Wakefield pointed out. “Challenges remain, though. Maintaining or even stabilizing the positive trajectory in 2022 will be frustrated, especially by intensifying inflationary pressures and their impacts.
“That said, we see a level of momentum not just in underwriting performance, but also in market reform measures, which have taken a big step forward through the agreement this year of a data standard for electronic trading. Lloyd’s remains a market which we will promote to our clients as resilient, innovative, and strong.”