At the same time, the underwriting performance improved more than expected by 1.6 percentage points to deliver a combined ratio of 91.9%, despite major claims of 12.7% including losses arising from the conflict in Ukraine and from Hurricane Ian in Florida.
The attritional loss ratio has improved to 48.4% (FY 2021: 48.9%), prior year releases were 3.6% (FY2021: 2.1%) and the expense ratio dropped to 34.4% (FY 2021: 35.5%).
The Mark to Market accounting treatment of rising interest rates on fixed income portfolios forced a write down of asset values and is forecast to lead to higher yields and investment returns in future years. The reported investment loss of approximately GBP 3 billion (FY 2021: GBP 0.9 billion income) is in line with the result reported at the half year. The investment loss has no cash impact, and is expected to be reversed out over the next two to three years as the assets reach maturity.
The investment loss will result in a full year loss before tax of approximately GBP 0.8 billion (FY2021: profit GBP 2.3 billion).
Lloyd's will announce its final FY2022 results on 23 March 2023, subject to the completion of all relevant audit and assurance requirements by its auditors and approval by Lloyd's Council.
"2022 showed both strong premium growth and a continued fall in expenses, which, alongside a high-quality balance sheet demonstrate that our market is in the best shape to offer both an attractive return to capital and investors as well as providing businesses the insurance protection they need in these uncertain times", said John Neal, CEO of Lloyd's.