Lloyds of London has warned the ongoing conflict in Ukraine will be a “major claim” this year, after posting a return to profitability on the back its best results in six years.
The London insurer said it had returned to profitability after posting overall profits of £2.3bn for the full year 2021, compared to a £0.9bn loss the previous year.
The insurer said it paid out £19.9bn worth of claims last year, including £2.9bn to customers impacted by Covid, as it claimed its turnaround had been driven by a focus on profitability.
Looking ahead, the 336-year-old insurance market said the war in Ukraine will be a “major claim” in 2022, as the firm said it is in “close dialogue” with the market to understand its exposures.
However, the City of London mainstay noted that Ukrainian, Belarusian, and Russian businesses make up less than one per cent of Lloyds global footprint.
The firm said that all direct and indirect claims are expected to fall within manageable tolerances, as it said claims linked the Ukraine crisis will not pose any solvency challenges.
Lloyds said it had strengthened its solvency position by £2.6bn over the past year, to build up huge coffers of £36.6bn, giving it a central solvency ratio of 388 per cent.
Lloyds CEO John Neal said: “In a world buffeted by increasingly complex and connected risks – from the pandemic to a geopolitical conflict – the Lloyd’s market is standing by its customers and supporting their recovery when things go wrong.”
“Against this backdrop, I’m pleased to see the market return to profitability following the decisive action taken in recent years to improve performance.”
“The market’s underwriting discipline will enable sustainable profitability in the years to come, coupled with a balance sheet that can support our ambition to grow profitably.”