How does the present banking turmoil affect Lloyd’s?
The insurance coverage market has an publicity of about £8.2 billion to the continuing banking turmoil, of which, £3.5 billion pertains to world systemically essential banks, Keese mentioned.
“Given that these banks are unlikely to default, the remaining credit risk exposure to banks is therefore £4.6 billion,” Keese mentioned throughout Lloyd’s earnings name on Thursday (March 23). “This exposure is well spread across all markets and members.”
Lloyd’s publicity to US regional banks sits at round £630 million. Exposure to AT1 loans is at £33 million.
“We believe that the current issues do not put our positive investment outlook at risk,” mentioned Keese. “However, we are in close contact with our market and regulators to understand our exposure and how we should respond.”
What is Lloyd’s publicity to Credit Suisse?
Meanwhile, Lloyd’s funding portfolio to Credit Suisse was “not material to the market,” in line with CEO John Neal.
“We have started quite early to de-risk all opposition. That’s true for the assets as well as the underwriting relationships we have with Credit Suisse,” Neal mentioned.
During the earnings name, Lloyd’s pressured its excellent underwriting efficiency in 2022, regardless of the mark-to-market fall within the worth of its bond holdings that led to a £800 million web loss.
Rising costs helped buoy the insurance coverage market to development, in line with Neal, who mentioned that Lloyd’s is well-positioned to climate additional uncertainty in 2023 attributable to its robust steadiness sheet.
Lloyd’s reported £46.7 billion in gross written premium for the complete yr of 2022, up from £39.2 billion within the yr prior, as a mixed ratio of 91.9%.
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