Is Lloyd’s still relevant?

An impressive set of 2021 results for Lloyd’s this week, after the dire numbers in the COVID-wreck that was 2020.

In a nutshell: GWP of £39.2bn (2020: £35.5bn); profit before tax of £2.3bn (2020: £0.9bn loss); underwriting profit of £1.7bn (2020: loss of £2.7bn); and a combined ratio of 93.5% (2020: 110.3%).

There are many ways to approach these admirable set of numbers, of course, but the one I want to focus on is the first: GWP of £35.5 billion.

The increase from the previous year is impressive enough in itself, but what really stood out for me is just how much Lloyd’s has managed to grow its premium base in the quarter of a century I have been writing about the market.

In 1997, Lloyd’s GWP was £7.8 billion, which adjusted for inflation would now equate to roughly £15 billion. I make that a real terms growth in GWP over the period of some 261%. That equates to some 10% a year!

Not bad, eh?

Of course, one could argue that we are comparing apples with pears. The 1997 Lloyd’s was a weakened beast, just beginning its tentative recovery from R&R, with corporate capital yet to really make its mark. Its reputation was badly damaged, and it is understandable that some premium which would otherwise have found its way there would have been channelled into other markets by brokers keen to play it safe.

Still, I think the current premium figure for the market speaks for itself: this is clearly an institution which is providing the right risk products to cater for the contemporary risk manager.

It doesn’t stop there. From an emerging risk perspective, this is an organisation which continues to respond to the changing world of risk, encouraging and supporting innovative approaches and dynamic product development, from climate change risks to cyber; from reputational risks to robotics.

So, to answer my (admittedly click-baity) question: yes, Lloyd’s is clearly, and proudly, as relevant as ever. Bravo!

Enjoy the read,

Marcus Alcock

Editor, Emerging Risks

Follow us on twitter: @risksEmerging

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