These losses were reportedly driven by a “worsening” of underwriting performance in the pecuniary loss market, with the data suggesting that the business line fell to a £656.5m underwriting loss for 2020. This compares to an underwriting profit of £96.7m for 2019.
Furthermore, the data claimed that these losses also coincided with a drop in gross written premiums (GWP) in the sector which fell by more than a quarter to £530.2m over 2020, compared with £739.1m in 2019 and £946.3m for 2018.
While the sector has already pushed through substantial price increases, the research showed that more will be needed to offset the losses already experienced by the market to date.
Meanwhile, premiums have increased by more than 50% year-on-year in every quarter since the start of the pandemic, but financial pressures will continue to affect businesses as the world’s economies continue to emerge from the pandemic.
Across the whole of the Lloyd’s market, the data showed that only two business lines achieved underwriting profits for 2020, with motor business reporting a profit of more than £42.2m for 2020, compared with £8.6m in 2019, which was aided by the reduction of driving miles during the pandemic.