Lloyd’s of London warned that the fallout from the Ukraine war will deliver a “major claim” for the insurance market in 2022 and said it was in talks with partners to understand the level of exposure.
Although business underwritten by the Lloyd's market in Ukraine, Russia and Belarus represents less than 1% of Lloyd's gross written premiums, indirect exposure will come from the aviation, marine, trade credit and political risk lines of business, the company said.
“The Russian invasion of Ukraine will have short, medium and long-term impacts on Lloyd’s performance and balance sheet,’’ it said in a statement. “At this early stage it is difficult to assess the full financial impact of the crisis.”
Lloyd’s, the world’s oldest insurance market, however, said direct and indirect claims are expected to fall within “manageable tolerances” and won’t create any solvency challenges.
The comments came as the specialist market said it swung to a pretax profit of £2.3bn in 2021 from a £0.9bn loss a year earlier.
The combined ratio, or expenses and claims as a percentage of costs, fell to 93.5% from 110.3%, indicating improved underwriting.
Gross written premiums increased to £39.2bln from £35.5bn.