@PIC.
Two major UK insurers announced their 2023 results on Thursday as the last few companies published their accounts for a turbulent year.
Lloyd’s of London said its accounts “demonstrate solid profitability on both the underwriting and investment sides, and a strong balance sheet”. In early March, Lloyd’s released its trading update for 2023.
In its full results, the iconic marketplace said its gross written premium was £52.1 billion for 2023 compared to 2022’s £46.7 billion.
The market delivered an underwriting profit of £5.9 billion – compared to £2.6 billion in 2022 – a £3.3 billion increase on the previous year.
“The market produced an outstanding investment result, reflecting the higher risk-free interest rates around the world.”
“This contributed to a 7.9 percentage point improvement in the combined ratio to 84.0% (compared to 2022’s ratio of 91.9% – the strongest result since 2007,” Lloyd’s said. “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% (full year 2022: 79.2%).”
Investment returns of £5.3 billion driven by higher risk-free interest rates around the world and the unwind of the previously booked mark-to-market loss, contributed to an overall profit before tax of £10.7 billion – in 2022 there was £0.8 billion loss. This compares to a £3.1 billion loss of investment returns in 2022. The company’s Chief Financial Officer, Burkhard Keese, said that they saw strong investment returns. “The market produced an outstanding investment result, reflecting the higher risk-free interest rates around the world alongside the unwind of paper losses from the mark-to-market accounting system booked in previous years.”
“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,” said John Neal, CEO of Lloyd’s.
Other UK insurers have already released their full-year 2023 results during the past few months including Aviva, Beazley, and Hiscox. For Aviva, arguably the UK’s largest insurer, the results showed that its operating profit was up 9%, with “continued growth momentum across the Group”, as it said in its official press release.
London-based bulk annuity insurer the Pension Insurance Corporation (PIC) released its results on Thursday as well.
"Our conservatively invested portfolio stands at £46.8 billion, and we were pleased to have avoided problems with US regional banks.”
“The Group had a very strong year, and our results demonstrate sustainable growth, increased profitability, and excellent customer service,” said Tracy Blackwell, Chief Executive Officer of PIC in its press release. “During the year we completed the landmark £6.2 billion buy-in of two pension schemes sponsored by RSA Group, we made pension payments of £2.1 billion, our highest ever, with policyholder satisfaction levels of 99.3%, and we have now paid £13.6 billion in pensions in total.”
“We are delighted to have continued investing in vital UK infrastructure, creating considerable social value, including funding the UK’s first reservoir in over 30 years. We have now invested £13 billion in UK infrastructure and £29 billion in the UK in total. Our conservatively invested portfolio stands at £46.8 billion, and we were pleased to have avoided problems with US regional banks, commercial real estate, and those caused by the demise of Credit Suisse.”
"We went into the new year well placed to help trustees looking to secure their member benefits."
She added that PIC’s balance sheet was “robust” with a year-end solvency ratio of 211%, which “means we went into the new year well placed to help trustees looking to secure their member benefits in what we expect to be a very busy year”.
“During the first two months of 2024 we completed £1.5 billion of new business, with an industry pipeline of £50 billion expected to complete this year.”
PIC said it had a solvency ratio of 211% compared to 226% in 2022. Its equity own funds stood at £6 billion compared to £5.2 billion in 2022.
Its portfolio was at £46.8 billion compared to 2022’s £41.2 billion, with insurance liabilities of £41.2 billion - £33.7 billion in 2022.
It has £29 billion invested in the UK as at year end and had no defaults for 11 years within the portfolio.
“PIC invested £1.6 billion in privately sourced UK debt investments during the year [and] invested £13 billion in UK infrastructure in total,” it said.
