Lloyd's demands full pricing push to keep insurers ahead of inflation

Lloyd's syndicates must push on pricing to keep pace with inflation and likely difficulties on the reinsurance markets, Lloyd's top officials argued in resenting the group's 6M financial results.

"They've got to keep adjusting price," CEO John Neal said of his expectations for syndicates in the pending review cycle. "Inflation needs to be countered by price."

Reinsurance costs add another driver to the pricing needs, Neal added. "The reinsurance market is likely to be more challenging so we are expecting managing agents to be alert, which goes to the discussion on price."

Comments come early in the process of Lloyd's review of syndicate targets, so Neal declined to give indication on the process to date. "It's a little too early for detail on that."

"The sense which we have got is that the market has gotten into a good rhythm about what our expectations are," Neal said, "so we don't have a sense that plans are going to be out of synch."

CFO Burkhard Keese drove home the point on inflation, which he considers "truly challenging."

"The only antidote for inflation is price increases," he said.

Some 65% of syndicates have already made explicit adjustments to reserves for inflation and another 25% have made "explicit considerations". The average uplift in reserves reported by syndicates comes to 2.3%, he indicated.

Did you get value from this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.