Solid profitability on the underwriting and investment sides propelled Lloyd’s to an overall profit before tax of £10.7 billion, or approximately $13.5 billion, for the 2023 fiscal year.

That compares with a 2022 loss of £800 million ($1 billion).

The market delivered an underwriting profit of £5.9 billion ($7.5 billion), a £3.3 billion ($4.2 billion) increase on the previous year.

This contributed to a 7.9 percentage point improvement in the combined ratio to 84 per cent – the strongest result since 2007.

Underwriting benefited from lower costs from large risks and natural catastrophe claims, with the underlying combined ratio (combined ratio excluding major claims) of 80.5 per cent (FY2022: 79.2 per cent).

Lloyd’s delivered a third consecutive year of double-digit growth, with the market’s gross written premium increasing by 11.6 per cent to £52.1 billion ($65.8 billion), driven by volume growth of 4 per cent.

With price increases of 7 per cent offsetting inflationary trends, the Lloyd’s market has now seen 24 consecutive quarters of positive price improvement.

The drive to improve performance and reduce the cost of doing business at Lloyd’s has resulted in a further 0.1 per cent reduction in the attritional loss ratio to 48.3 per cent (FY2022: 48.4 per cent), with the expense ratio remaining flat at 34.4 per cent.

Investment returns of £5.3 billion ($6.7 billion), driven by higher risk-free interest rates around the world and the unwind of the previously booked mark-to-market loss, contributed to the overall profit.

In the prior year, Lloyd’s reported an investment loss of £3.1bn ($3.9bn).

The organisation said a strong and resilient balance sheet has supported central and marketwide solvency ratios of 503 per cent and 207 per cent respectively (FY2022: 412 per cent and 181 per cent), with total capital, reserves and subordinated loan notes increasing 12.7 per cent to £45.3 billion ($57.2bn).

John Neal, chief executive officer of Lloyd’s, said: “The results we’re reporting today are our best in recent history, with an outstanding underwriting result underpinned by a strong and resilient balance sheet.

“Our ability to attract – and provide returns on – capital is vital to ensuring we can support our customers through uncertainty.

“We’ll continue working with our market to deliver consistent profitable performance through disciplined underwriting – enhancing the value, relevance and long-term sustainability of Lloyd’s.”