After the International Underwriting Association (IUA) recently published statistics of annual GWP levels in the company market for 2022, this publication has analysed the top-line and business line growth figures, alongside Lloyd's GWP disclosures in its annual results for last year.
The numbers depict the extent to which cyber is surpassing all others in the company market, dwarfing growth in construction, marine, aviation, motor and property.
The cyber class of business registered growth of 72% year-on-year, with GWP reaching £1.1bn in the company market for 2022.
Despite the difficulties Lloyd's has experienced with the rollout of its policy to separate coverage for cyber war as well as related wordings on state-backed attacks, the Corporation said earlier this year that cyber represents its fastest-growing L60 class.
Lloyd's chief of markets Patrick Tiernan has spoken of the need for the cyber product to mature in his market messages this year, revealing in a recent press briefing that the Corporation is working with managing agents to help establish a product for state-backed cyber attacks.
Delegated authority business
Insurance Insider's analysis also showed that delegated authority (DA) business in the London company market contracted in 2022, after three straight years of growth.
Lloyd's didn't disclose DA GWP figures in its annual report for 2022, but as at the end of last year, DA business represented around 42% of around £47bn GWP written at Lloyd's.
The corporation's performance management directorate warned last year that it would be applying more "surgical" oversight of DA business throughout 2023.
Primary casualty growth
This publication’s analysis also shows the extent to which casualty business has been growing in recent years at Lloyd’s, relative to the company market.
However casualty GWP is not directly comparable between the two, as for example, the IUA stripped out cyber from its 2022 casualty premium total, while Lloyd’s included it.
In its report, the IUA said casualty business is calculated for the company market by combining premium totals for liability, professional lines and accident and health business.
At Lloyd's, casualty insurance has been something of a turnaround success story in recent years, with this line posting a profit of £536mn for 2022, compared to a loss of £17m the prior year.
Casualty GWP also increased by 25% at Lloyd’s to nearly £13bn for 2022, from £10.4bn in 2021. Cyber was one of the lines that helped drive this growth throughout 2022, as pricing momentum was maintained in the aftermath of ransomware attacks.
On a more general outlook for casualty pricing within Lloyd's, managing agents told this publication earlier this year that they're expecting declines in casualty rates to be offset by ongoing rating momentum in the property market.
Among specific casualty lines, D&O remains a key talking point, given the remarks from Tiernan recently on "moronic" underwriting and pricing movements in this class.
Top-line growth
Total GWP figures for 2022 between Lloyd's and the company market depict how the two are starting to arrive at a 50/50 split share of combined London market premium.
Premium income in the London company market increased by almost one-quarter in 2022 to £44bn, while at Lloyd's it increased by just over 20% to £47bn.
Together, the two bring total London market GWP for 2022 to £91bn.
In 2021, the difference in GWP between the two markets was £9bn, which contracted to just £3bn in 2022.
In addition to this sign of movement to a more equal share, the IUA also said there were no longer signs of a drift from Lloyd’s to the company market.
Previously, the IUA had reported evidence of business shifting into the company sector, including instances of dual platform insurers ceasing entirely to underwrite via a Lloyd’s syndicate.
However, the trade body’s report said: "This trend appears now to have dropped in significance and was not referenced in any company commentaries this year. Indeed, one firm noted some business transferred from its company arm into Lloyd’s.”
In terms of top-line growth drivers last year, property remained the largest class of business in the company market, accounting for 27% of the GWP total. Liability and professional lines business each accounted for a further 15% of the total, while marine accounted for 14%.
Lloyd’s growth has also been spurred by a booming property market — where GWP was up 39% to £7.9bn for the 2023 half-year period. CEO John Neal said last month that the US direct and facultative market was experiencing the best underwriting conditions he had seen in his career.
For its half-year results, Lloyd's reported the steepest year-over-year increase in top-line growth for more than a decade, to £29bn for H1 2023. This was driven by both incumbents and start-ups, as well as rating growth.
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